Will You Be Taxed On The D3 Auction House?

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This is a question some of you Diablo fans might have or eventually will have once you start playing Diablo 3 (Early 2012 Release Date Hopefully). If you don't already know, there will be two auction houses in Diablo 3. One you will be able to use in-game gold to bid/purchase items, while the other will require actual money. In addition to this, Blizzard is going to charge listing fees and I have heard a rumor that they may also be taking a % of profit of each item you sell.

Blizzard will be making money from the auction house, as long as people continue to play Diablo 3. Others may complain about this, but I think it is a great way to balance out the end-game and give some real value to in-game gold, which was essentially pointless in Diablo 2. Anyone who played or plays Diablo 2 knows what I am talking about... with gambling being the only real "gold sink". Anyway, the money that Blizzard makes from selling Diablo 3 plus the fees it will generate from the auction house will definitely be taxed. They are a large company, and there is no way to hide the revenue they will generate from the Auction House.

The real question is though, will players be taxed on the money they make from selling items in the Auction House? I was curious about this, because I too was thinking about playing D3 to make a nice profit myself. I did some research on the topic and this is what I found:

You must file taxes if you earn the following amounts of income:

Self-employed, any age: $400
Children and Teens classified as a dependent: $5,700
Single, under 65: $9,350
Single, over 65: $10,750
Married, filing jointly, both spouses under 65: $18,700
Married, filing jointly, one spouse over 65: $19,850
Married, filing jointly, both spouses over 65: $20,900
Married, filing separately, any age: $3,650

*Taken From The Turbo-Tax Website

Going by this information, I'd guess that many would D3 players would fit under the Self-employed, any age category earning income of $400+ for the year. So if a person earned more than $400 in income for the year, then he or she would have to pay taxes on it (Probably 10% going by the 2011 Tax Bracket above).

If you are a casual player you will probably not reach the $400 income solely on the D3 Auction House. However, if you play the game a lot (5+ Hours a day) it is very likely you could reach this mark in a year. Also note that your income will = (Price of Items Sold) - (Auction Listing Fee + Possible Blizzard Item Tax). But really the truth is that player earnings from the D3 Auction House will all come down to what the market is like once Diablo 3 is released.

Players may be willing to pay more money for Diablo 3 items, which will benefit Sellers. On the other hand people may not be spending much money on items and Buyers will benefit from this. In my mind once the game is out for a few months the D3 market will balance itself out and item prices will be determined by supply and demand of the market.

The game really looks great from the gameplay videos I've watched on Youtube. I really look forward to see how this all turns out once the game is finally released.

Thanks for reading, and feel free to comment below.