Taxing my +4 blade of Winning?

[Pacemaker]

Sort of old, but I couldn't find any other thread on this (sorry if there is one). I find this to be crazy, how can they tax you on something that doesn't exist, and isn't owned by you (according to the eula).

http://secondlife.reuters.com/stories/2...-launchs-probe-into-virtual-economies/

Edit: added another link

 

[mugs]

If you turn it into real money, then and only then should it be taxed.

 

[pontifex]

Originally posted by: Pacemaker

Sort of old, but I couldn't find any other thread on this (sorry if there is one). I find this to be crazy, how can they tax you one something that doesn't exist, and isn't owned by you (according to the eula).

http://secondlife.reuters.com/stories/2...-launchs-probe-into-virtual-economies/

i didn't read the article but in second life, people are making real money by selling virtual items their characters make. second life is a lot different than WoW because this type of stuff is actually encouraged.

i'm not sure about taxing stuff in WoW, though, unless they mean like people who sell and buy gold and items, etc.

 

[Pacemaker]

Originally posted by: pontifex

Originally posted by: Pacemaker

Sort of old, but I couldn't find any other thread on this (sorry if there is one). I find this to be crazy, how can they tax you one something that doesn't exist, and isn't owned by you (according to the eula).

http://secondlife.reuters.com/stories/2...-launchs-probe-into-virtual-economies/

i didn't read the article but in second life, people are making real money by selling virtual items their characters make. second life is a lot different than WoW because this type of stuff is actually encouraged.

i'm not sure about taxing stuff in WoW, though, unless they mean like people who sell and buy gold and items, etc.

The article is refering to taxing in game transactions, or possibly taxing virtual items as part of property tax. They are "researching" it.

 

[WolverineGator]

Lucky for me I have a Tax Shield to go with my two handed sword.

 

[Gunslinger08]

Only real income can and ever will be taxed.

 

[dullard]

How can you sell ($500M/year) something that you don't own? There is your problem. If you don't own it, you can't sell it. But people do sell it anyways. Then they complain that they were taxed?

Just because something might not be legal, doesn't mean the tax doesn't have to be paid. That is a big loophole stopper in the law. Sales of illegal drugs are taxed and the dealer has to pay tax on those deals. The law enforcement may not be able to get a drug dealing conviction, but they can easilly get the drug dealer for tax avoidance.

Same thing here. You are violating your EULA contract, thereby violating contract laws. But that doesn't mean that your profits are tax free. In the US government, if money is moved from one hand to another, it is taxed. The only exception is a gift and even gifts can be taxed in the right circumstance.

 

[Gunslinger08]

Originally posted by: WolverineGator
Lucky for me I have a Tax Shield to go with my two handed sword.

You have 3 arms?

 

[pontifex]

Originally posted by: Pacemaker

Originally posted by: pontifex

Originally posted by: Pacemaker

Sort of old, but I couldn't find any other thread on this (sorry if there is one). I find this to be crazy, how can they tax you one something that doesn't exist, and isn't owned by you (according to the eula).

http://secondlife.reuters.com/stories/2...-launchs-probe-into-virtual-economies/

i didn't read the article but in second life, people are making real money by selling virtual items their characters make. second life is a lot different than WoW because this type of stuff is actually encouraged.

i'm not sure about taxing stuff in WoW, though, unless they mean like people who sell and buy gold and items, etc.

The article is refering to taxing in game transactions, or possibly taxing virtual items as part of property tax. They are "researching" it.

ok, now thats fvcked up then

 

[Pacemaker]

Originally posted by: dullard
How can you sell ($500M/year) something that you don't own? There is your problem. If you don't own it, you can't sell it. But people do sell it anyways. Then they complain that they were taxed?

Just because something might not be legal, doesn't mean the tax doesn't have to be paid. That is a big loophole stopper in the law. Sales of illegal drugs are taxed and the dealer has to pay tax on those deals. The law enforcement may not be able to get a drug dealing conviction, but they can easilly get the drug dealer for tax avoidance.

Same thing here. You are violating your EULA contract, thereby violating contract laws. But that doesn't mean that your profits are tax free. In the US government, if money is moved from one hand to another, it is taxed. The only exception is a gift and even gifts can be taxed in the right circumstance.

I agree that the second you sell the item you should be taxed, but taxing the item while still in game is stupid. The money and items on my character are worth nothing unless I sell them (which is something you are not supposed to do in most cases), but the government wants to tax them anyway?

 

[Pacemaker]

Originally posted by: pontifex

Originally posted by: Pacemaker

Originally posted by: pontifex

Originally posted by: Pacemaker

Sort of old, but I couldn't find any other thread on this (sorry if there is one). I find this to be crazy, how can they tax you one something that doesn't exist, and isn't owned by you (according to the eula).

http://secondlife.reuters.com/stories/2...-launchs-probe-into-virtual-economies/

i didn't read the article but in second life, people are making real money by selling virtual items their characters make. second life is a lot different than WoW because this type of stuff is actually encouraged.

i'm not sure about taxing stuff in WoW, though, unless they mean like people who sell and buy gold and items, etc.

The article is refering to taxing in game transactions, or possibly taxing virtual items as part of property tax. They are "researching" it.

ok, now thats fvcked up then

?Right now we?re at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise ? taxes, barter exchanges, property and wealth,? said Dan Miller, senior economist for the Joint Economic Committee. ?You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there?s no mechanism by which you?re taxed on this stuff,? he said.

That is messed up.

 

[Pantoot]

Originally posted by: Pacemaker
The article is refering to taxing in game transactions, or possibly taxing virtual items as part of property tax. They are "researching" it.

Which really means that someone in the Joint Economic Committee is really into WoW right now and had to justify to their boss why they are playing at work. Now it is a project...hurray!

 

[dullard]

Originally posted by: Pacemaker
I agree that the second you sell the item you should be taxed, but taxing the item while still in game is stupid. The money and items on my character are worth nothing unless I sell them (which is something you are not supposed to do in most cases), but the government wants to tax them anyway?

Reread the article. To me, it says nothing about taxing something that you haven't sold. "For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month." They don't want to tax the money or items on your character. They want to tax the money and items you sell on EBay for real US money in a transaction with another user.

 

[Pacemaker]

Originally posted by: dullard

Originally posted by: Pacemaker
I agree that the second you sell the item you should be taxed, but taxing the item while still in game is stupid. The money and items on my character are worth nothing unless I sell them (which is something you are not supposed to do in most cases), but the government wants to tax them anyway?

Reread the article. To me, it says nothing about taxing something that you haven't sold. "For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month." They don't want to tax the money or items on your character. They want to tax the money and items you sell on EBay for real US money in a transaction with another user.

?You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there?s no mechanism by which you?re taxed on this stuff,?

That seems to me to be calling virtual items assets and subject to capital gains.

 

[Demon-Xanth]

Taxing when you take USD out makes sense. Taxing in game currency does not.

...does the IRS take gil now?

 

[mugs]

Originally posted by: dullard

Originally posted by: Pacemaker
I agree that the second you sell the item you should be taxed, but taxing the item while still in game is stupid. The money and items on my character are worth nothing unless I sell them (which is something you are not supposed to do in most cases), but the government wants to tax them anyway?

Reread the article. To me, it says nothing about taxing something that you haven't sold. "For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month." They don't want to tax the money or items on your character. They want to tax the money and items you sell on EBay for real US money in a transaction with another user.

Originally posted by: The Article
The rapid emergence of virtual economies has outstripped current tax law in many areas, but there are some clear-cut guidelines that already apply. For example, people who cash out of virtual economies by converting their assets into real-world currencies are required to report their incomes to the IRS and other national tax authorities, depending on where they live in the real world.

Less clearly defined is how to deal with virtual income and capital gains that never leave the virtual economy. In the real world if you earn income or own an asset that increases in value, you are usually required to pay taxes. In a virtual economy the situation is unclear.

Edit: It's not clear if the US$500,000 in transactions that happen in Second Life are actually transactions in real money or if that's an estimate of the real-world value of the "virtual money" used in the game.

 

[mugs]

Edit: little late

 

[Pacemaker]

Originally posted by: mugs
Now the question is, if they're going to tax your virtual money, can you pay your taxes with virtual money?

What's stranger than that is what happens if you have a run where you lose in game money (due to repairs consumables etc.) can you write that off on your taxes?

Edit: for clarity

 

[GasX]

I can see it now...

I get a sword of epic awesomeness from fighting a bid bag dragon. I then sell my newly acquired virtual item in the virtual auction house for virtual gold. The government then takes virtual gold from me and sells it on eBay to some noob who doesn't want to put in the time... Then Blizzard cancels the governments account for selling gold...

 

[chambersc]

Originally posted by: dullard
How can you sell ($500M/year) something that you don't own? There is your problem. If you don't own it, you can't sell it. But people do sell it anyways. Then they complain that they were taxed?

Just because something might not be legal, doesn't mean the tax doesn't have to be paid. That is a big loophole stopper in the law. Sales of illegal drugs are taxed and the dealer has to pay tax on those deals. The law enforcement may not be able to get a drug dealing conviction, but they can easilly get the drug dealer for tax avoidance.

Same thing here. You are violating your EULA contract, thereby violating contract laws. But that doesn't mean that your profits are tax free. In the US government, if money is moved from one hand to another, it is taxed. The only exception is a gift and even gifts can be taxed in the right circumstance.

As to your drugs analogy, http://www.norml.org/index.cfm?Group_ID=6668 will provide further information. It does exist and if the government chooses to tax it, they can because we the people give them the power. Don't like it -- revolt.

 

[dullard]

Originally posted by: mugs
Edit: It's not clear if the US$500,000 in transactions that happen in Second Life are actually transactions in real money or if that's an estimate of the real-world value of the "virtual money" used in the game.

If there is $500,000 of US dollars being transacted, then it is real money. If it is 500,000 Simoleans (or any other online fake currency, then it isn't real money). It is very simple to distinguish the two.

Heck, even if they did try to tax in Simoleans, just pay your online taxes with Simoleans.

 

[mugs]

Originally posted by: dullard

Originally posted by: mugs
Edit: It's not clear if the US$500,000 in transactions that happen in Second Life are actually transactions in real money or if that's an estimate of the real-world value of the "virtual money" used in the game.

If there is $500,000 of US dollars being transacted, then it is real money. If it is 500,000 Simoleans (or any other online fake currency, then it isn't real money). It is very simple to distinguish the two.

Heck, even if they did try to tax in Simoleans, just pay your online taxes with Simoleans.

Originally posted by: Second Life Website
The Marketplace currently supports millions of US dollars in monthly transactions. This commerce is handled with the in-world currency, the Linden dollar, which can be converted to US dollars at several thriving online currency exchanges.

Originally posted by: Article
For example, in Second Life up to US$500,000 in user-to-user transactions take place every day, and the economy is growing by 10 to 15 percent a month.

Like I said, the user-to-user transactions take place using in-game money, and that was converted to the US equivalent for the article. Transactions involving real money are done between the user and the official in-game currency exchange.

 

[Fingolfin269]

Second Life is one world right?

I wonder how they could possibly apply this model to a game like WoW that has different economies across different servers. 1 gold on a server that opened today is worth a lot more than on a server opened at launch. The same goes for items. Hopefully this will cause some tax man's head to explode during research.