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will i get taxed on withdrawals from real cash economy games?
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situation #1: i keep playing, and eventually earn 1000 ped. i withdraw   this. will i get taxed? if so, by how much? this is probably considered an "award", so whatever your country taxes for lottery/gambling winnings would be applicable. if there's no specific taxation on this kinds of income - then it is ordinary income. situation #2: i deposit $5000, play the game, lose some money and   withdraw ped equal to $4000. will i get taxed? if so, by how much? since it is a game, it is unlikely that deducting losses from your income would be allowed.  however, the $4000 would probably not be taxed as income (since you are getting your own money back). situation #3: i deposit $5000 and use this to buy in-game items. i   later sell these items for massive profits (200%+, this can happen   over the course of 2 years for sure). i withdraw $10000. will i get   taxed? if so, by how much? either the same as #1 (i.e.: ordinary income) or as capital gains (although tax authority may argue that this was not a for-profit investment, and capital gains treatment shouldn't be applicable). will i get taxed on withdrawals from real cash economy games? and do   the taxes apply to the full withdrawal, or only on the profits? or   only on the profits above a certain amount? generally income taxes only apply on income. so if you paid $10000 and got back $12000 - only the $2000 is considered income. however some countries may tax full amounts under certain conditions. such taxes are called "franchise taxes". for a proper tax advice consult with the locally licensed tax adviser.
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