Australia To Tax Money From Second Life, But Can Money Spent On Your Avatar Be A Write-Off?
from the H&R-Block-Next-To-Set-Up-In-Second-Life dept
There continues to be a lot of discussion about the
real world implications of activity inside virtual worlds. One of the issues is how to
deal with taxation, and it appears that
Australia has taken the lead, announcing that they plan to tax money made in virtual worlds, specifically citing Second Life Linden Dollars. A spokesperson for the country's tax office said that if you're getting monetary benefit from the site, then it should be taxed like any other income. What's not clear is when the money is taxed. Do they tax you when you've cashed in your Linden Dollars for Australian Dollars? If they did this, the policy would make sense, as it's basically like a capital gains tax, which is levied after someone sells their stock. Or, do they tax the player based on their Linden Dollars even if they don't cash out. This would be a ridiculous policy as it would basically be taxing people for playing a game. Assuming it's the former, the taxation occurs after withdrawing the money, it could be a real boon for Second Life, as it would discourage people from taking money out of the in-game economy.
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The most likely method...
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Bad Direction
They used to be taxed in Second Life. They threw their own revolution and redid the system. Also, how would they be able to track every single person who plays Second Life in Australia?
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Re: Bad Direction
What I wonder about is what other regulation will be needed? What expenses will be available for write-off (i.e. will they accept Second Life as a self-employment or will they only accept it as a hobby? The difference is being able to write off the cost of the computer used to play it).
The distinction of Second Life rather than WoW (and many other games) is the expectation that money earned in the game can be removed at some exchange rate; I am not aware of that being possible in WoW (although there are transactions that happen outside the game which affect behavior in the game; those would be impossible to track).
Lastly, if you look at it as gambling winnings (earning money from playing a game) it does make a certain kind of sense.
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Re: Bad Direction
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Holy cow
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Should translate into a writeoff
p.s. I have never tried second life, so my thoughts on this could be off =
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Re: Should translate into a writeoff
I'm not a tax adviser, but consult one before taking this advice. My understanding (subject to being wrong) is that with gambling, you can only deduct your losses against your winnings. If you win $10,000 and lose $50,000, you can only deduct $10K of your $50K loss.
Similar with stock losses, you can only deduct your losses from your winnings and a very small ($3K?) amount of the losses over that a year (rolling the remaining losses forward).
One of the reasons that the net did so well in the 90s was that the politicians in the US hadn’t figure out what it was or how to tax it. Once they get an inter-state taxation system going, net commerce will be drastically impacted.
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How does that work for kids
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but WoW says itwon't go after ppl doing this, it's just your own risk.
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Surely you mean a capital games tax?
;)
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That's the gubmint for you...
-Ronald Reagan
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Come on now, this is just like anything else and not newsworthy.
I still don't see why the gov gets to tax casino winnings but you can't count losses as an expense. THAT'S bullcrap.
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Stuart
http://www.earnersblog.com
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How come..
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sheesh
Until then its a joke to even consider it.
Its way too early before taxing becomes a possibiilty.
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Taxes
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