Dragon Slayers or Tax Evaders? 40
Julian Dibbell has a piece on the LegalAffairs site exploring the possibility that MMOG transactions could be taxed. From the article: "June 2003. I set myself the following challenge, posting it on my web log for the world to see: 'On April 15, 2004, I will truthfully report to the IRS that my primary source of income is the sale of imaginary goods--and that I earn more from it, on a monthly basis, than I have ever earned as a professional writer.' In the course of this project, I made a total of $11,000 selling on eBay the items I won playing a game called Ultima Online, $3,900 of which was in the final, most profitable month. I reported my profit to the IRS, and I paid the requisite taxes. But after I did so, a troublesome set of questions continued to nag at me--for which even IRS publication 525, entitled 'Taxable and Nontaxable Income,' couldn't provide answers."
He is selling a service (Score:2, Insightful)
Its called the service industry
Re:He is selling a service (Score:3, Insightful)
Heck, even money on your bank account is imaginary in exactly the same way that online game money is. It's just that more people accept it, for more things - but there is an exchange rate now, so it doesn't matter much.
In at least some ways (socially for many people, and monetarily, as stories like this show), MMO games are closer and closer to being "real life".
Best $650 ever (Score:2)
Re:Best $650 ever (Score:4, Funny)
Business Expense (Score:4, Insightful)
Re:Business Expense (Score:1)
Re:Business Expense (Score:2)
Re:Business Expense (Score:2)
In an obscure situation like this, it would be hard to prove (or even disprove) such intent. The best way to prove it would be to show steady income from sales of MMORPG items that is consistent with the hours played. For instance, if he plays for 200 hours but only makes about $50 from the sale of one item, the IRS auditor may not believe him.
Of course, this whole argument is aca
Re:Business Expense (Score:3, Informative)
Somehow, I doubt it.
After all, many of us have jobs/businesses that we consider `fun' ... but we can still deduct legitimate business expenses.
Ultimately, the IRS sees the difference between a hobby and a business that a business makes a profit (or at least it's intended to make a profit, and I believe that it needs to do so at least 3 out
Perhaps if never used for entertainment (Score:2)
I would imagine so if the account in question is used strictly for commercial purposes and never for personal entertainment. I recall rules of this nature with respect to home offices.
Re:Perhaps if never used for entertainment (Score:2)
Re:utter nonsense (Score:2)
And in other news (Score:2)
(paraphrased) - whatever you bought online this year you owe us taxes for. Please fill out the cash you spent in this little box and send it in.
Guess how many people actually volunteer that information? ;)
Monopoly (Score:2, Insightful)
What happens when it looses its value because the game ended?
IMarv
Re:Monopoly (Score:2)
* Not sure about the conversion factor of Monopoly dollars to US dollars
Re:Monopoly (Score:2)
Re:Monopoly (Score:2)
Re:Monopoly (Score:2)
Re:Monopoly (Score:2)
As long as you don't convert it to real-world currency, then it's just a game. So the answer is obviously no. Anything other answer is too much FUD-factor and sensationalism designed to sell banner ads.
Re:Maybe he'd earn more as a writer (Score:1)
Some comments (Score:4, Insightful)
Of course, players that spend 16 hours a day playing games and accumulate a significant stockpile of high quality game items, instead of working a real job and obtaining such tangable objects in real life, might consider that the value of the in-game property they've obtained should at least partially compensate the value of the time they've waste.... er... spent playing the game, so that instead of treating it as addictive consumable entertainment, which has little to no real world value once spent, they treat it as tangible, if virtual, compensation for hard work. Be that as it may though, the player has no authority in determining the value of the virtual property. That right remains the sole discretion of the company that manages the game, and since the monthly fee paid is a service charge only, and not considered an investment in the company, the value of the money spent does not obligate the player to a stockholder status, nor does the hard work "working" toward obtaining virtual property give any real world value to it.
So some player decides to ignore the TOS and sell his virtual property on ebay anyway, and someone has enough money to waste to justify paying for it. It now comes time to report these "earnings" to the IRS. Fear not, the IRS will take your money, no matter how you obtained it. They don't really even care of the source was illegal, just as long as you report it accurately. They're unlikely to care if you had to violate the terms of service of some company to obtain the ill gotten income. On the same note, they're unlikely to pursue the game as a source of untapped tax revenue since because the majority of players will never engage in commerce outside of the game environment, there will be no real world value attached to the property for the players involved. After all, those items which are purchased and/or sold in meatspace can be removed from the game at the slightest keystroke of a game master, and there would be no recourse or compensation expected by the players involved. And this is the way it HAS to be. Otherwise, If I sell you a super glass sword of shattering for $1000 and 5 minutes after transferring it to you in game, some newbie thief comes along and steals it from you, can that player be prosecuted for a $1000 theft? So far, I've yet to see this happen. And as long as that doesn't happen, there's no recognizable real world value to any of the in-game property, and the IRS is not going to bother getting involved. They'll pay more attention when you quit the game and start working for a living.
-Restil
Re:Some comments (Score:4, Funny)
Ah, so many meatspace items/services I could apply this to...
Re:Some comments (Score:2)
And yet, ironically, if you decide to ignore your tax return, becuase you don't care about getting a few hundred bucks back at the end of the year, and consider the loss part of the "convience cost for not filing a tax return", they will hunt you down and FORCE you to fill it out just so they can give you the money that you are owed. Happened
Re:Some comments (Score:2)
Re:Some comments (Score:2)
And yet it is taxable.
EULA (Score:1)
Re:EULA (Score:1)
My two cents (Score:1)
can i get a tax break on my virtual home? (Score:1)
The most posted Slashdot story ever. (Score:2)
Just how many times will this story be posted to Slashdot? This has to be about the tenth time since April 15, 2004.
Nothing to see here folks, move along.
Re:The most posted Slashdot story ever. (Score:1)
Holy crap, what a way to earn a living... (Score:3, Funny)
So If I start a guild.. (Score:1)