L$ vs RL$
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Hiro Pendragon
bye bye f0rums!
Join date: 22 Jan 2004
Posts: 5,905
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10-21-2004 03:02
From: Jauani Wu
hiro, if your RL boss offered you L$ equivalent in pay, would you accept it? imagine the tax breaks.
we already discussed that philip is talking out of both sides of his mouth as a good ceo should to pump this game. encouraging commerce and us to give value to this game money is not the same as giving the game money value it self. last time i checked, the institution that has the greatest control over the value of the L$ officially values it at 2000 L$ = 1 USD. Link
feel free to start a new thread. i'm sure there is probably some commerce and economy professionals in our community ready to interject with some mind numbing theory for us.
That's a really good question. Tax breaks, first of all, would only apply if you never convert L$ -> US$. Once you convert them, they are considered income like any other - job, inheritence, hobby, etc. I forget the thread but in another thread someone posted a link to the IRS's rules of hobby income. You're a little off with the value - it's more like 200L/1USD. But that's probably a type-o. But back to your question - I would take L$ if and only if they were as stable as the USD$. Because the US greenback is fairly stable and not subject to a lot of market fluctuations, I would choose the USD.
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Jauani Wu
pancake rabbit
Join date: 7 Apr 2003
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10-21-2004 03:05
it is not a typo. 10 000 L$ = 5 USD .'. 2 000 L$ = 1 USD link
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Eggy Lippmann
Wiktator
Join date: 1 May 2003
Posts: 7,939
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10-21-2004 03:06
I would choose the euro  |
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Kris Ritter
paradoxical embolism
Join date: 31 Oct 2003
Posts: 6,627
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10-21-2004 03:09
I once changed up some L$ into USD$ into GBP that I could actually spend.
I lost about half on the transaction in total - mostly due to the fact that the USD is at an all time low against the pound, but some in admin fees, currency conversion etc.
So from an international point of view using the current exchange systems available, I still treat the Linden Dollar as play money, because it's value is of little value to me. Certainly NOT anywhere near 200/250 to the dollar by the time I actually get it.
So... I know it's not really the answer to the question, but no, I wouldnt want Linden Dollars instead of real ones (and preferably Pounds Sterling instead of dollars!) in any scenario, thanks.
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Hiro Pendragon
bye bye f0rums!
Join date: 22 Jan 2004
Posts: 5,905
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10-21-2004 03:12
From: Jauani Wu it is not a typo. 10 000 L$ = 5 USD .'. 2 000 L$ = 1 USD linkHehehe Oh, okay, you're using the L$ for Land rates, of which... errr can't find the quote. Basically it's not economically feasable for LL to change rates since they make money from US$ payments for land, and not from L$ payments. So that's not an accurate measurement, whereas GOM or even IGE is a much closer estimate to the worth of the L$
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Ace Cassidy
Resident Bohemian
Join date: 5 Apr 2004
Posts: 1,228
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10-21-2004 04:39
From: Hiro Pendragon Tax breaks, first of all, would only apply if you never convert L$ -> US$. That's not true, Hiro. Uncle Sam, and his buddies down at Internal Revenue don't give a hoot whether you're income is in US$, Euros, or tiddly-winks. Look at their crackdown on barter, and you'll see that US$ never have to be involved for the tax man to want his cut. If they ever decide that L$ have value, and notice people realizing REAL income in L$, they'll want their slice of your pie. Even if you paid your rent, bought your groceries, and gassed up your car using L$, and never saw a red cent, IRS would be well within their legal rights to come after you. - Ace
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Hiro Pendragon
bye bye f0rums!
Join date: 22 Jan 2004
Posts: 5,905
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10-21-2004 05:09
From: Ace Cassidy
If they ever decide that L$ have value, and notice people realizing REAL income in L$, they'll want their slice of your pie.
- Ace
You posted all that to split hairs? I was talking how currently things are.
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Hiro Pendragon
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Ace Cassidy
Resident Bohemian
Join date: 5 Apr 2004
Posts: 1,228
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10-21-2004 05:15
From: Hiro Pendragon You posted all that to split hairs? I was talking how currently things are. As far as the law is concerned, that is how it is now. L$ have value, and the IRS would be well within the law if they decided to come after any or all of us Americans. The only thing stopping them right now is that there isn't enough potential revenue for it to be worth their while. - Ace
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Hiro Pendragon
bye bye f0rums!
Join date: 22 Jan 2004
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10-21-2004 05:18
From: Ace Cassidy As far as the law is concerned, that is how it is now. L$ have value, and the IRS would be well within the law if they decided to come after any or all of us Americans. The only thing stopping them right now is that there isn't enough potential revenue for it to be worth their while.
- Ace Oh I see. I doubt it; Take a look at online casinos as an example - they move plenty of money but it isn't taxed until the player cashes out, or the casino does.
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Anshe Chung
Business Girl
Join date: 22 Mar 2004
Posts: 1,615
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10-21-2004 07:44
I am afraid that Ace is absolutely right here  And, yes, whatever people make in SL will eventually be taxed once they convert to the real world and pay for schools, unemployed people or hospitals in the real world. What would really hurt SL though, would be if governments would start charging VAT tax for SL transactions or tax a club owner when employing a dancer. If SL really take over the world, then tax office will soon take over SL. Just like EBay.
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Artillo Fredericks
Friendly Orange Demon
Join date: 1 Jun 2004
Posts: 1,327
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10-21-2004 08:15
From: Ace Cassidy tiddly-winks HAHAA he said tiddly-winks! What's the current exchange rate on tiddly-winks these days?  Regarding Jauani Wu's post about the value of L$ vs. USD... he linked to the Land for Lindens rate schedule ( https://secondlife.com/account/account-landcredit.php), which has more to do with LL making money off suckers willing to pay 10x what they should for land using their L$ than they would if they simply converted their L$ using GOM or IGE and then paid their SL tier fee with PayPal or a CC. as of yesterday, GOM Buy rates were at about $1.23/block of 250L$, or $1/203.25L$. As far as Hobby Income goes, here's some useful links regarding Hobby Income: http://www.irs.gov/faqs/faq-kw99.html (see quote below) From: someone How do you distinguish between a business and a hobby?
Since hobby expenses are deductible only to the extent of hobby income, it is important to distinquish hobby expenses from expenses incurred in an activity engaged in for profit. In making this distinction, all facts and circumstances with respect to the activity are taken into account and no one factor is determinative. Among the factors which should normally be taken into account are the following:
Whether you carry on the activity in a businesslike manner
Whether the time and effort you put into the activity indicate you intend to make it profitable
Whether you depend on income from the activity for your livelihood
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business)
Whether you change your methods of operation in an attempt to improve profitability
Whether you, or your advisors, have the knowledge needed to carry on the activity as a successful business
Whether you were successful in making a profit in similar activities in the past
Whether the activity makes a profit in some years, and how much profit it makes
Whether you can expect to make a future profit from the appreciation of the assets used in the activity
Additional information on this topic is available in section 1.183-2 (b) of the federal tax regulations. I suppose the answer to whether SL income is taxable by the IRS might be whether or not it is realized as income: IE converted to REAL cash (thru GOM/IGE), as opposed to remaining a simple in-world variable. Arti
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Kim Anubis
The Magician
Join date: 3 Jun 2004
Posts: 921
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10-21-2004 10:17
Sure, money earned in SL is taxable. That means the SL membership fee and land tier fee for a shop, or shop rent, is deductible if you file a Schedule C for your business.
In fact, that also sets you up to deduct your home office expenses.
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Toy LaFollette
I eat paintchips
Join date: 11 Feb 2004
Posts: 2,359
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10-21-2004 10:49
home office restrictions are very tight IRS Pub 587
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Shadow Weaver
Ancient
Join date: 13 Jan 2003
Posts: 2,808
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10-21-2004 10:52
Yeah Toy that has just been enacted over the last two years as well which sux big ones.
Used too, where my computer was, was always considered my office. But now with an Xbox,PS2,PS1 and a Nintindo Game Cube its no longer considerd an office but a family entertainment room. Go figure.
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Talen Morgan
Amused
Join date: 2 Apr 2004
Posts: 3,097
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10-21-2004 11:04
From: Shadow Weaver Yeah Toy that has just been enacted over the last two years as well which sux big ones.
Used too, where my computer was, was always considered my office. But now with an Xbox,PS2,PS1 and a Nintindo Game Cube its no longer considerd an office but a family entertainment room. Go figure. If you buy your xbox, ps2 and nintendo games with company money then they can be in the company office. They can also be written off as an entertainment expence...My old accountant loved me  |
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Shadow Weaver
Ancient
Join date: 13 Jan 2003
Posts: 2,808
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10-21-2004 11:07
Ohh ohh that lying freakazoid accountant of mine is gonna hear from me now...hehe
Guess I gotta wait till she feeds the Kid before I can berate her..hehe
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Everyone here is an adult. This ain't DisneyLand, and Mickey Mouse isn't going to swat you with a stick if you say "holy crapola."<Pathfinder Linden> New Worlds new Adventures Formerly known as Jade Wolf my business name has now changed to Dragon Shadow. Im me in world for Locations of my apparrel Online Authorized Trademark Licensed Apparel http://www.cafepress.com/slvisionsOR Visit The Website @
www.slvisions.com
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Toy LaFollette
I eat paintchips
Join date: 11 Feb 2004
Posts: 2,359
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10-21-2004 11:29
eeeeps, Talen, your accountant should prolly read IRS PUB 334 hehehe
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Talen Morgan
Amused
Join date: 2 Apr 2004
Posts: 3,097
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10-21-2004 11:38
From: Toy LaFollette eeeeps, Talen, your accountant should prolly read IRS PUB 334 hehehe Oh its quite legal...entertainment expence...you see some people take clients out to dinner some take them to the xbox. It's amazing the things that you can actually do sometimes.....although after persistent fighting the accountant still wouldn't let us claim the plaboy channel as a business expence....but basic cable was doable. |
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Toy LaFollette
I eat paintchips
Join date: 11 Feb 2004
Posts: 2,359
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10-21-2004 11:40
hehehe........ well have at it Ive been doing taxes for HR Block for several years when Im bored in the winter and I know I couldnt do it
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"So you see, my loyalty lies with Second Life, not with Linden Lab. Where I perceive the actions of Linden Lab to be in conflict with the best interests of Second Life, I side with Second Life."-Jacek
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Talen Morgan
Amused
Join date: 2 Apr 2004
Posts: 3,097
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10-21-2004 11:48
From: Toy LaFollette hehehe........ well have at it Ive been doing taxes for HR Block for several years when Im bored in the winter and I know I couldnt do it This was 4 years ago..don't know whats changed since. Basically we took my partners garage and made it an office closing it off from the house entirely...seperate phone, cable, electricity. The Games are the beauty...you see we bought them as business gifts to give to suppliers and such but wound up with one extra of each console  ....therefore we could write them off as a business expence and could still have them in our office. We needed cable and internet connections to keep up to date on our business. We worked the system before it could work us. |
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Toy LaFollette
I eat paintchips
Join date: 11 Feb 2004
Posts: 2,359
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10-21-2004 11:58
sounds good, I was teasing ya anyways, Talen
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