I need to start off with a disclaimer. I am not a tax professional. This article is based upon many hours of research I have done into the tax code. But, taxes and tax law are not my main area of expertise. You should consult with a tax professional before using any of the information presented in this article.

Your video game collection could save you money on your taxes. If the IRS considers you a video game investor instead of just a collector, you can deduct expenses related to your collection and lower your tax bill this April 15. So what does the IRS think you are? A video game collector or investor?

The difference between a video game investor and collector in the eyes of the IRS depends on what your primary purpose is for owning the video games. If you buy the games for personal pleasure only and to play them, you are a collector. If you buy games with the intention of making money, you are an investor. This may sound straight forward, but the IRS looks at many factors to determine your status:


Do you keep good records? Investors keep track of what they buy and sell.

Do you consult outside advisors? Investors buy magazines and books from experts and ask others for advice.

How much time or effort do you expend? Investors generally spend more time than collectors researching, maintaining, and tracking their video games.

Can the assets appreciate? You can't be an investor if you have no chance of making money.

Have you made money from this activity before? Investors will probably have made money at some point previously in the same manor.

How much fun do you get from your purchases? Investors buy more for monetary value than personal pleasure.