[Opensim-users] Virtual World Currency gets more complicated

Wed Jan 20 20:30:36 UTC 2010

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 <karen_palen at yahoo.com> 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 <janefoxclaw at gmail.com> wrote:
>
> > From: Jane Foxclaw <janefoxclaw at gmail.com>
> > Subject: Re: [Opensim-users] Virtual World Currency gets more complicated
> > To: opensim-users at lists.berlios.de
> > 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 <karen_palen at yahoo.com>
> > 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 <janefoxclaw at gmail.com>
> > wrote:
> >
> >
> >
> > > From: Jane Foxclaw <janefoxclaw at gmail.com>
> >
> > > Subject: Re: [Opensim-users] Virtual
> > World Currency gets more complicated
> >
> > > To: opensim-users at lists.berlios.de
> >
> > > 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 <l.cranston at gmail.com>
> >
> > > 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 <janefoxclaw at gmail.com>
> >
> > > 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 <karen_palen at yahoo.com>
> >
> > > 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
> >
> > >
> >
> > > Opensim-users at lists.berlios.de
> >
> > >
> >
> > > https://lists.berlios.de/mailman/listinfo/opensim-users
> >
> > >
> >
> > >
> >
> > >
> >
> > >
> >
> > > _______________________________________________
> >
> > >
> >
> > > Opensim-users mailing list
> >
> > >
> >
> > > Opensim-users at lists.berlios.de
> >
> > >
> >
> > > https://lists.berlios.de/mailman/listinfo/opensim-users
> >
> > >
> >
> > >
> >
> > >
> >
> > >
> >
> > >
> >
> > > --
> >
> > >
> >
> > >
> >
> > > _______________________________________________
> >
> > >
> >
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> >
> > >
> >
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> >
> > >
> >
> > > https://lists.berlios.de/mailman/listinfo/opensim-users
> >
> > >
> >
> > >
> >
> > >
> >
> > >
> >
> > >
> >
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> >
> >
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> >
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