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Withdrawl Inquiry-- File for taxes?

Moocow

Moocow

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James Moocow Holder
So me and some soc mates were talking and we came to talking about withdrawing peds.


I told them i had withdrawn 6k peds before, and when i got the cash it was like 550$ usd.


Someone said i have to fill out a W2 or W4 or whatever, like when you hit the lottery or something.


But you have to fill one out if you hit more than $1100 or 1200 or something.


Does anyone know if you have to claim it as income or something? or after a certain Dollar amount?
 
hmm .. Subscribing.. :scratch2:
 
Btw i gotta find out by tax day lol...Don't need IRS knockin on my door :D



Im just wondering, cause i dont think i have any of the paperwork or what not from the actual Withdrawl.
 
typically it after $600, but most people will say to contact your tax preparer to find out.
 
withdrew 6k peds, but i got 550$ ... so am i on the border line?
 
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if you only withdrew $550 and have to claim it you can also deduct all your deposits from that if you have any.

I have won items sub $600 at banquets. I was told at the events I did not have to file taxes. But when I won $900 diamond earrings I was able to deduct all cost of banquet and ticket stubs I kept as proof I had to pay for chance to win.
 
Well this is a fine line. Maybe someone like Star or ND could help out more. But when you win gambling say on horses or slots in New york state and win 600 $ in one shot and over you have to file the win. On the other hand if it is a casino withdraw it is 10k$. But on the other hand you have to account the money you invested this year. So take all the records that you have invested and the money you withdrawn and i figure if the with draw is on the + then you will have to file. To be safe i would considering contact a tax profesional.
 
I don't know anything about this topic, but... does it matter to file if you are withdrawing because you "won" those peds from good loot returns or if you're just withdrawing from all the money you originally deposit?
 
I doubt you will need to file taxes on it.

Its a personal gain and unless I'm wrong (its different everywhere) you need to have earned around $9000 before you have to pay tax on a personal gain.
 
I ended up just depositing it back over the course of 2 months....but do i have to file for the 550$ i took out?
 
Imperious said:
I don't know anything about this topic, but... does it matter to file if you are withdrawing because you "won" those peds from good loot returns or if you're just withdrawing from all the money you originally deposit?
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and how would they be able to distinguish the difference :(


Im just making sure i dont have to file, because i wasnt planning on it
 
Moocow said:
and how would they be able to distinguish the difference :(


Im just making sure i dont have to file, because i wasnt planning on it
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www.entropiauniverse.com I am pretty sure there is a transactions history section where you can check all deposits and withdrawals made. That could be printed and used to distinguish the difference.
Note: Don't quote me on this, as I am not qualified to give legal advice.
 
thats true...but withdrawing peds isnt really "Income" is it?


So i wouldnt have to file it?
 
The only proper answer you'll get is if you see your tax advisor or accountant and explain the situation.

You will probably find that the amounts aren't large enough to bother and that it'll fall under personal activity or a hobby, esp. if your deposits for the year are greater than withdrawals.

It is still highly recommended to ask a professional who knows your local tax laws.

- Deathifier
 
Probably true


Il figure it out eventually....

thanks for all the input guys...thorny question ;)
 
If you have to pay taxes on it as income you can also deduct expenses against the income such as computer internet conncection and potentially home office(part of rent or mortgage) and all costs directly associated to the game(deposits) This means that most people wont have reportable income from the game. Only a few in game will have to worry about that. (Star, ND and probably a few others and maybe Buzz at some point)
 
Gluepot said:
www.entropiauniverse.com I am pretty sure there is a transactions history section where you can check all deposits and withdrawals made. That could be printed and used to distinguish the difference.
Note: Don't quote me on this, as I am not qualified to give legal advice.
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only goes back 1,5 years.

If you want a complete one send a support case.


Im not sure if u have to file, I am sure that u wont need to pay taxes as monies paid offset monies gained.
 
CycoKick said:
only goes back 1,5 years.

If you want a complete one send a support case.


Im not sure if u have to file, I am sure that u wont need to pay taxes as monies paid offset monies gained.
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Aww darn, I thought the ingame one was 1.5 years and online was forever :(
I wouldn't know....
 
I've looked into that kind of thing a bit in England for myself recently as I've started to get comissions for things as well as being interested in withdrawing from Eu.

In England any financial gain form something that is considered a hobby is called income and has to be declared but you are allowed to deduct all related costs from it like deposits. So if you have deposited more than withdrawn you will still have to declare it and then list your costs (deposits) against it.

I'm not sure how it works in the US but if you have deposited more yet they are happy that it is ment to be a source of income for you they may give you some tax back on your other earnings to make up for the loss. You do have to have withdrawn for this though and would need to be able to provide reasonable proof it was meant to be an income not a one off.
 
as above poster says income from eu is more an income than a win on the lottery. Thus you should probably pay tax on it, but as also stated you can compare it to your expenses and thus your most likely not having to pay any tax.

In sweden we can make some 30000 SEk before we have to pay taxes.
 
I think in the UK this sort of thing whether you like it or not is classed as gambling.

In the UK at least there is no tax for gambling wins. Therefore no tax on any withdrawals whether factoring in deposits or not.

The definition is a very fine line atm between this being an income or a gambling win. but at the moment i think its airing more on the side of a win than anything else. It can only really be classed as an income if you DEFINATELY get a value of money for doing a particular activity. And we all know this isnt the case.
 
Moocow said:
So me and some soc mates were talking and we came to talking about withdrawing peds.


I told them i had withdrawn 6k peds before, and when i got the cash it was like 550$ usd.


Someone said i have to fill out a W2 or W4 or whatever, like when you hit the lottery or something.


But you have to fill one out if you hit more than $1100 or 1200 or something.


Does anyone know if you have to claim it as income or something? or after a certain Dollar amount?
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The rule in my state (Mass) is anything over Gambling Win over $500.

Tickets bigger than that need to be cashed at the main office and Race Tracks/Casinos make you fill out the forms after that point..

If you have documented deposits over that though, I wouldn't worry about it. Talk with a Tax expert to be sure if your still worried about it.
 
Creature said:
I think in the UK this sort of thing whether you like it or not is classed as gambling.

In the UK at least there is no tax for gambling wins. Therefore no tax on any withdrawals whether factoring in deposits or not.

The definition is a very fine line atm between this being an income or a gambling win. but at the moment i think its airing more on the side of a win than anything else. It can only really be classed as an income if you DEFINATELY get a value of money for doing a particular activity. And we all know this isnt the case.
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Withdrawing money from Eu does not count as gambling wins for two reasons. Firstly its a computer game so it is classed as a hobby and secondly because MA have had the swedish gambling peeps say this is not a Casino.

There may be a certain amount of risk in withdrawing money but there are some more sure ways to make money here like trading and the governemnt just look at the big picture. They are always going to decide to tax you on it rather than not.
 
Depends on whether the Tax Authority believes the EULA or not.

If they do, they have to recognise that you have no ownership of any assets or rights in EU, which is unlike the situation with trading, a hobby, or even a casino.

It can therefore be argued that
- your deposits are Gifts to Mindark
- your withdrawals are Gifts from Mindark
- usually Gifts are not taxable
- if they are taxable, since deposits and withdrawals are separate gifts, with no ownership inbetween, you cannot deduct expenses or deposits from the withdrawal amount.

You can see why you need tax advice.
 
chevrons said:
Depends on whether the Tax Authority believes the EULA or not.

If they do, they have to recognise that you have no ownership of any assets or rights in EU, which is unlike the situation with trading, a hobby, or even a casino.

It can therefore be argued that
- your deposits are Gifts to Mindark
- your withdrawals are Gifts from Mindark
- usually Gifts are not taxable
- if they are taxable, since deposits and withdrawals are separate gifts, with no ownership inbetween, you cannot deduct expenses or deposits from the withdrawal amount.

You can see why you need tax advice.
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each country has its own tax laws, which makes broad statements here (an international forum) difficult. but this much is true: your deposits are deposits and withdrawals are withdrawals. they are certainly not "gifts", MA book deposits as sales and count withdrawals against gross sales to arrive at net sales. plus i dont think its possible to "gift" a company anything (imagine, you could gift Vodafone for your mobile and they pay no tax?).

the point above about hobbies seems near enough for UK, as long as its a hobby you should declare the income but will be able to offset the costs associated, so the IR will probably rather you just left it out (unless you are withdrawing substantial amounts regularly).
 
I Live in Nebraska, United States.


This must be one of the most controversial questions ever, and you can see why I posted lol :D


Afaik I do not need to file, because it wasnt a huge sump of money,I deposited it back, and i havnt profited from it (unless i total chip out).



Till then i dont think i need to worry about filing it, as it is not "gambling" and is not "income"
 
E.K.x said:
I doubt you will need to file taxes on it.

Its a personal gain and unless I'm wrong (its different everywhere) you need to have earned around $9000 before you have to pay tax on a personal gain.
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This is the truth, more or less. Personal gains that total less than ~$10,000 USD you do not have to report or file.

The caveat in this case is how MA is determining their payouts. In all honesty I dont think they are writing these sums off as gifts. They are rather a business expense, and thus taxable as if the recipient was a contractor.

So you can err on the side of online gambling, in which case personal gains theory work in your favor if audited, or you can err on the side of caution, in which cause you better file your 1088 reporting all income gained during this business venture, and deducting all costs of doing business on your side.

Believe me, as a 1088 myself I write off all Entropia related expenses as costs of doing business.
 
MarieWoodell said:
Withdrawing money from Eu does not count as gambling wins for two reasons. Firstly its a computer game so it is classed as a hobby and secondly because MA have had the swedish gambling peeps say this is not a Casino.

There may be a certain amount of risk in withdrawing money but there are some more sure ways to make money here like trading and the governemnt just look at the big picture. They are always going to decide to tax you on it rather than not.
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Virtual worlds have been getting loads of press again lately lol. Theres nothing really that specifically states anything to do with Virtual Worlds at the moment. But if anything Capital Gains Tax would apply on withdrawals that would total more than £10100 in 2009/10 and anything over that would be taxed at 18% but you can offset that against losses over previous years.

I do know governments are looking more and more into ways to properly regulate and tax incomes from VWs because at the moment theres no sure way of getting a person to declare it. Even if they knew they had too :)
 
hmm...

Hmm... have to wonder about this one...

Normally, I'd say it's similar to turbosquid and other online selling places, and needs to be added to the personal income for tax purposes... HOWEVER, most deposits are usually done with credit cards by a lot of avatars, so it's an expense as well as an income... wonder if you could itemize it out like that to make up for losses?
 
For poker winnings, even if you lose more than you win, you still have to file, you cannot zero out your losses, you still have to report your winnings.

IE: You make $5,000 but then lose $4,000. You can't say you won $1,000, you have to say you won $5,000 but lost $4,000

I woud imagine entropia is under a similar clause, I believe for most places it is $600 you need to report, anything under that(IE:$550) is fine without reporting.

I wouldn't worry about it too much.
 
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