Do you pay tax on your Splinterlands earnings?///Summoner Spellbook Giveaway

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Two days ago, I was on the phone with @selfhelp4trolls on a Twitter space and it turned out to be a very extensive conversation. We talked about a bunch of things, including taxation in different countries.

I talked about how crypto tax in Nigeria doesn't exist in actuality and then continued to enquire about how it works in Japan.

My findings were rather interesting because they elaborated on what is an otherwise complicated taxation policy that hasn't quite caught up with crypto technology.

Play to earn and paying tax

During the conversation, I mentioned how a couple of things I don't understand about crypto tax and highlighted Splinterlands earnings.

My misunderstanding about the topic is a pretty straightforward question about how earnings from Splinterlands will be taxed.

This question is particularly for investors that participate in ranked battles and tournaments.

I know crypto tax is in the percentages, and I also know that I participate in roughly 30, battles per day, so am I supposed to track all of it?

Also, considering that you drop points and lose rank, which coincidentally means a reduction in your earnings per battle; if compared to your investment in the game, isn't that technically a loss? Does that mean a reduction in tax?

Are you a man or a Machine Business?

One of the discussions we had was also about who to pay tax to. Assuming you live in Japan but the crypto only enters your American account, who are you indebted to?

I also learned that some countries like America have you by the balls and you pay tax no matter where you are and then there are others like Nigeria that don't give a shit.

Assuming you live in Nigeria and then move to somewhere that gives a shit but your Nigerian bank account is still functional and receives naira, is it tax evasion to convert crypto to Naira and then send it over to your new account in the new country?

I learned that it might all be dependent on how you're operating; so it's either a personal thing or a business thing and the reaction varies between both.

More questions than answers

Conversations about crypto tax often lead to more questions than answers. Regardless of the country, I find that people hardly have specifics to give as a response.

This is obviously because the rules surrounding crypto are very complicated and that's mostly because the government still struggles with crypto acceptance.

Personally, I think everything would be a lot easier if the government just created their own unique crypto wallet for every coin, employed people to manage it, and then allow people to pay tax in any crypto they hold.

That way, we'll just desk with volume, rather than fluctuations in fiat valuations of the currency and other complications.

The crypto taxation system does not have any mechanism that can account for earnings from play to earn games like Splinterlands and others.

Until a proper solution is devised, there will always be misunderstandings about crypto tax. As if that isn't confusing enough, it's made even more complicated by earnings from dynamic sources like Splinterlands and other similar blockchain games.

Spellbook Giveaway

Just like last week, you don't have to do anything special and the winner will be chosen randomly on Saturday evening. Everyone who posts comments in this post will be eligible for the raffle, however, if you'd like to exempt yourself, you can indicate in your comment.


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14 comments
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For me, I have yet to play the game, so no comment 😅

That being said I would love a spellbook, as I want to get involved in Splinterlands. I've been hearing too many good things about it.

Thanks so much :)

!PIZZA !ALIVE

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(Edited)

I'm glad i came across this post... I would love a Summoners spell book.

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It's really amazing to pay tax buy playing a game 🙂

BTW splinter land is a game changer project.

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Crypto taxes in Germany are weird. 0% taxes for cryptos you held over a year. Thats cool! 42% for each time you sell a token (under a year) - ok, let me just quickly analyze my past four years on HIVE and send you a 25GB file. sigh I will probably just say it hasn't been that much, compared to my SPS earnings and I seek an agreement to only look at relevant future trades. And capital gains like SPS airdrops are 25%. I plan to pay that, so that they are happy, because that is where the money is.

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Crypto taxes are insanely complicated, which is one of the reasons I just decided to quit paying taxes altogether. Sure makes life a lot easier.

some countries like America have you by the balls and you pay tax no matter where you are

Yeah, in some ways it really sucks to be American. You can't even legally renounce your citizenship without paying a huge fee for it.

As far as I'm concerned, "tax evasion" is a crime invented by the criminals who rule us. They can have my money but they'll have to kill me to get it.

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That shit i wild man. Paying tax when you're not even in the country? wtf yo

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Yeah, like I said… we Americans are ruled by criminals.

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Incredibly interesting concept. The idea of play2earn impact on taxes is an absolute nightmare I'm worried about dealing with.

It will be interesting when Splinterlands starts issuing 1099s to its players.

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Its only earnings when you convert it to dollars (or naira). Even if some country invents a rule that is different from this, this is the rule I will follow because an unjust law is not 'the law' - whenever I withdraw to local currency I count it as regular income.

If you buy crypto for money, and then sell it later, the difference in cost is capital gains.

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