For users, if the money is real, and if US law sees it that way, it becomes a just another normal business transaction to exchange virtual goods. And that includes sales taxes, and IRS income reporting.
It really isn't that far fetched - The reason Bob paid 500 USD for a golf club is because of the increased enjoyment he gets from having it; it impresses other, knowledgeable players, and increases his enjoyment of the game. The reason Alice paid 1200 L$/Meta/WoWgold for a virtual item is because of the increased enjoyment she gets from having it; it impresses other, knowledgeable players, and increases her enjoyment of the game. Similar transactions, with similar reasons for making the transactions. Why, in the mind of a tax lawyer, should they be treated differently? Bob paid his state's sales tax, why shouldn't Mary? From a tax man's view, the virtual is an improvement on the physical, because every exchange must be documented, by a central authority. For the person/company running the world, they are literally playing "bank" since they are holding real assets for users - the whole idea of "fiduciary obligations", as others mentioned, kicks in. Since a server crash could deny someone the peaceable use of their property, that could be a potential hassle as well... "money laundering" is an interesting angle, although the virtual realm is not the most appealing way to actually bury a transaction (imagine trying to move 50,000USD into and out of a sim, in a reasonable amount of time, given that most transactions are way below 1USD. You can see that buying and selling a car would be more attractive) But common sense is not the usual attribute of a tax agency. On Wed, Jan 20, 2010 at 3:58 AM, Karen Palen <[email protected]> wrote: > My favourite quote from him is that the US Tax code is a high stakes game > played with a 500,000 page rulebook! He delights in finding sets of rules in > one place that contradict others and using the result to save his clients > tax money. > > Many of his clients pay ZERO income tax BTW. > > Karen > > --- On Tue, 1/19/10, Jane Foxclaw <[email protected]> wrote: > > > From: Jane Foxclaw <[email protected]> > > Subject: Re: [Opensim-users] Virtual World Currency gets more complicated > > To: [email protected] > > Date: Tuesday, January 19, 2010, 8:36 PM > > He and I would get along then. I'm the > > same way. I speak my mind, even though some say I have a > > HUGE ego, which i do for a reason.. but I do admit it.. > > lol > > I would surely run my Grid as a Non-profit if it > > came down to it. It really depends on the situation. > > > > John > > > > On Tue, Jan 19, 2010 at 9:27 PM, > > Karen Palen <[email protected]> > > wrote: > > > > Actually that (and the other things I outlined in my > > earlier email) is one reason I NEVER intend to run my grid > > "for profit". > > > > > > > > If you ever plan to run a grid "for profit", do > > look at the rest of John Hyre's website though. He has a > > lot for good material and IMHO the right attitude about > > taxes. His tax law business is oriented to real world real > > estate, but many of the concepts carry over to the > > "virtual real estate" which is the only actual > > "product" sold by Second Life and most OpenSim > > grids that I have seen. > > > > > > > > > > BTW he would call you a wimp for "knuckling > > under" and not beating the government (IRS in this > > case) at their own game. He is nothing if not outspoken :-) > > > > > > > > Karen > > > > --- On Tue, 1/19/10, Jane Foxclaw <[email protected]> > > wrote: > > > > > > > > > From: Jane Foxclaw <[email protected]> > > > > > Subject: Re: [Opensim-users] Virtual > > World Currency gets more complicated > > > > > To: [email protected] > > > > > Date: Tuesday, January 19, 2010, 6:18 PM > > > > > If it happens it > > happens.. I'll just > > > > > stop messing with Virtual Sims at that point. No point > > in > > > > > giving money away to government. Make them earn it > > like they > > > > > never have in the past. > > > > > > > > > > On Tue, Jan 19, 2010 at 7:09 PM, > > > > > lamont cranston <[email protected]> > > > > > wrote: > > > > > > > > > > if the > > > > > currency is real, then you need to be cautious. > > > > > The tax man is watching. > > > > > > > > > > > > > > > On Tue, Jan 19, 2010 at 5:32 PM, > > > > > Jane Foxclaw <[email protected]> > > > > > wrote: > > > > > > > > > > Ok so your point here is that we > > > > > should NOT go live with currency ? because I am lost > > as to > > > > > what the point it is your trying to make here. > > > > > > > > > > > > > > > Sonya > > > > > > > > > > On Tue, Jan 19, 2010 at 4:14 PM, > > > > > Karen Palen <[email protected]> > > > > > wrote: > > > > > > > > > > > > > > > > > > > > This is from today's slashdot.org > > > > > > > > > > > > > > > > > > > > > > > > > I know many OpenSim users are planning to set up soem > > form > > > > > of currency exchange on their grids. THis si one of > > the > > > > > aspects that needs to be considered before > > "going > > > > > live". > > > > > > > > > > > > > > > > > > > > Karen > > > > > > > > > > > > > > > > > > > > > http://games.slashdot.org/story/10/01/19/1653240/Virtual-Currency-Becomes-Real-In-South-Korea > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > Virtual Currency Becomes Real In South Korea on > > Tuesday > > > > > January 19, @01:29PM > > > > > > > > > > Posted by Soulskill on Tuesday January 19, @01:29PM > > > > > > > > > > from the license-to-print-money dept. > > > > > > > > > > money > > > > > > > > > > garylian writes "Massively is reporting that the > > South > > > > > Korean Supreme Court has stated that virtual currency > > is the > > > > > equivalent of real-world money. For those of you who > > might > > > > > not be drawing the link, the core there is that > > selling > > > > > in-game currency for real money is essentially just > > an > > > > > exchange of currency and perfectly legal in South > > Korea. > > > > > This could have sweeping implications for RMT > > operations the > > > > > world over, not to mention free-to-play games and... > > well, > > > > > online games in general. The official story is > > available > > > > > online from JoongAng Daily." > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > _______________________________________________ > > > > > > > > > > Opensim-users mailing list > > > > > > > > > > [email protected] > > > > > > > > > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > > > > > > > > > > > > > > > > > > > > _______________________________________________ > > > > > > > > > > Opensim-users mailing list > > > > > > > > > > [email protected] > > > > > > > > > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > -- > > > > > > > > > > > > > > > _______________________________________________ > > > > > > > > > > Opensim-users mailing list > > > > > > > > > > [email protected] > > > > > > > > > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > -----Inline Attachment Follows----- > > > > > > > > > > _______________________________________________ > > > > > Opensim-users mailing list > > > > > [email protected] > > > > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > > > > > > > > > > > > > > > > _______________________________________________ > > > > Opensim-users mailing list > > > > [email protected] > > > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > > > > > -----Inline Attachment Follows----- > > > > _______________________________________________ > > Opensim-users mailing list > > [email protected] > > https://lists.berlios.de/mailman/listinfo/opensim-users > > > > > > _______________________________________________ > Opensim-users mailing list > [email protected] > https://lists.berlios.de/mailman/listinfo/opensim-users > --
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