GS & IRS $600 rule

[Methais]

What annoys me in this is how to explain to the IRS that the magic horn I sold in GS4 wasn't profit because I acquired it with silvers a year earlier. How would I even prove that it isn't income now. Do you think the auditor will understand?

First thing to say is "Do you play Gemstone IV?"

[Rjex]

And that's part of this issue for this community in particular. If someone receives 20k from people during DR, but they spent 17k on the SimuCoins, then they really only earned 3k in profit, but the IRS is going to see 20k and will expect that to show up on their tax return as income unless the person can prove it wasn't all income. This is such a clusterfuck.

This exactly. We're dealing with bullshit virtual items and currencies and no way to prove any of it is real. Anything they see coming in is going to be assumed to be 100% profit when it might 5% profit or worse yet, a loss. A few years ago you might have paid $4k for that piece of gear and now you can barely sell it for half of its value? Doesn't matter, better get ready to pay tax on that 2k pure profit that you just made according to the IRS.

[Methais]

From irs.gov on the topic: "Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable."

Isn't it standard practice here for buyers to mark our payments as gifts/F&F? Assuming your buyers are doing that, I think you're good, yeah?

Yes. Except for that one time Rendena bought silvers from me and didn't send as F&F. And someone else one other time too but I forgot who.

Dammit.

[Gelston]

Haha

[Lavastene]

Big oof.

You're telling me.

And that's part of this issue for this community in particular. If someone receives 20k from people during DR, but they spent 17k on the SimuCoins, then they really only earned 3k in profit, but the IRS is going to see 20k and will expect that to show up on their tax return as income unless the person can prove it wasn't all income. This is such a clusterfuck.

Yeah, my accountant and I will have fun with this all when I submit my returns. I don't have to worry about this for GS items, but for my tickets I will absolutely be deducting the cost of the purchase of the actual tickets.

[onurb]

If I donated several times to the Dreaven Foundation, thats tax exempt right?

[Tgo01]

If I donated several times to the Dreaven Foundation, thats tax exempt right?

All donations to the Dreaven Foundation are tax deductible.

[Neveragain]

What annoys me in this is how to explain to the IRS that the magic horn I sold in GS4 wasn't profit because I acquired it with silvers a year earlier. How would I even prove that it isn't income now. Do you think the auditor will understand?

Obviously they will have to audit SIMU.

Don't for a minute think that this isn't all about finding a way to tax virtual products. They know what the future holds for VR, they are not going to be left out.

[gilchristr]

"Isn't it standard practice here for buyers to mark our payments as gifts/F&F?"

Form over substance. You do not get a pass on paying tax simply because a payment is "marked" as friends and family. The true nature of the transaction is what controls. While this might not sound cool, you should pay the taxes you owe, and not cheat

[Parkbandit]

Use Zelle.

For whatever reason, they are not reporting this "income".. I'm guessing their lobbyists are just better than Venmo's/Paypal's.