Question about the “Round 1 of Unity’s Obstacle Tower Challenge” email

@TruthMaker Can you confirm that this Tax Tip will work worldwide? Links?

For those who have never had Tax experience before, the “prize” of $1100 GCP means days of unnecessary work…

…Obstacle Tax Challenge (OTC)

The Price Is Right … But The Taxes Are Wrong

@arthurj I’d also like to point out, that as per the contest rules, there is no mention in the eligibility criteria for requiring the need to provide government issued photo ID and social insurance number to participate. But this is the case if you’re forced to claim a prize you don’t want to continue to Round 2.

Additionally, there are no mentions in the rules about sharing data with an entity besides Unity and AICrowed, no mention of National Sweepstakes whatsoever.


As mentioned above, every country’s tax is governed differently, look at your tax law, or enquire with a tax practitioner. I just qualify as a businessman.

My tax tip comes from basic accounting. Buying bread for $1 and selling it for $1, means you have 0 profit. As far as I’m aware, generally tax is applied to profit. Similarly, if you “won” $1100, and spent $1100 in the same event in trying to obtain more profit, you ultimately make 0 profit, and hence no tax implications. (unless winnings increased)

As for the length of time that the paperwork for the tax takes, it’s essentially 1 or 2 records in your ledger ? perhaps 5-10min max. Whilst this is in context of a business, it would apply similarly to a service provided by an individual. Question you’re asking is, “Did I make a profit?”. So just keep your paper trail - receipts from google cloud.

Here’s a more complicated scenario:
The entry to this competition costs $500. I ultimately win $1100 from this competition. An accountant doing their job properly would only have you taxed for $600 ($1100 - $500 ), as the entry fee was an expense in order for you to gain the ability to obtain the $1100. If you didn’t win the $1100 however, you would have generated a loss of $500 and you would not be taxed at all - but you’d be smart to keep your accounting up to date.

@isy @ross_wightman Please bear in mind that it is your government who dictates the laws of your country, if you wanted to be upset with anyone regarding this tax dilemma, protest with your government. Tax is entirely unnecessary, and civilisation survived without income tax until less than 100 years ago. (American history, income tax was introduced to recuperate after a civil war, that civil war has long passed.)

I do agree that decoupling of the technical challenge from the taxes could have been provisioned.

@TruthMaker I’m not disputing tax law, taxes are taxes. You are likely correct in your analysis of the taxation scenario. However, in this case, for the amount involved, accepting the prize is not worth the tax liability, not worth the time and money to consult with my tax accountant, and definitely not worth handing over personal information to a 3rd party that I don’t trust or have an ongoing business relationship with.

We should be able to decline a given prize or assign it to another party and continue participating in the challenge on technical merit.

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We’ve sent in our team’s information and consent forms and also replied with verification with all of our team members’ emails but have not yet received any information with regards to eligibility of proceeding with round 2 or instructions to claim the GCP credits.

Is there a tentative date for this? and also how will this affect the deadline of round 2? We’re still waiting for a response before we keep pushing for the contest for round 2.

From reading the comments on the thread for the last few days it seems sad that good competitors may drop out due to the information submission/taxation constraints/changes. I’m footing and outstanding taxes on behalf of my team but if I were in the shoes of the other competitors it’s totally understandable that I wouldn’t be too happy with these requirements either.

I hope whatever happens turns out to be one everyone can agree upon and we can push round 2 and continue having a great competition.

@ross_wightman ah ok. I dispute tax law, and I encourage protesting against it. I do comply with the law non the less, doesn’t mean we can’t protest though - otherwise we’ll just continue to be taken advantage of. Gotta speak up for ourselves in today’s cruel world.

@wywarren I believe they scheduled for 15 May 2019 - see this link

To my knowledge, what Truthmaker said (you pay no tax if you spend that $1100) is not correct for most people with standard deduction schedule. It is true that you may be able to deduct the $1100 spent, if it qualifies for ‘work related expense.’ But unless you have mortgages or other deductions big enough that goes over the standard deduction amount, you won’t be choosing itemized deduction, hence, spending $1100 won’t save you from paying taxes on it.

Again, international laws may differ but in principle that is what I think. At the same time, I’m not a tax professional so I may be wrong, do not depend on this advice for your tax filings.

In the meantime, I think best way would be to “withhold” the tax portion from GCP credits and give us what is remaining after the tax witholding. But that might not be feasible to the sponsor.

@hanschoi86, thanks for the added clarity. And Yikes! Out of interest, was looking at your guys “standard” vs “itemized” deductions is quite scary! Some empathy shed. What really works in the complexity is that different states may apply different taxes :open_mouth:

Yes, the “accounting rule” I speak of applies to “businesses” (self-employment qualifies here, which is the audience I was aiming at).
I imagined that nobody would be competing as a company (you’d hence be acting as self-employed) - think being an individual or team of individuals was part of the competition rules.

Wikipedia affirms that the “accounting rule” applies to “corporations” (self-employed inclusive)

Reading in, If you’d like to pursuit this route, you need to be eligible for schedule C (or C-EZ) and file under those schedule terms. See IRS.

Found this interesting, thanks for the conversation & input