( Us Residents Taxed)?

Win a Free Region

https://support.secondlife.com/ics/support/default.asp?deptID=4417&task=knowledge&questionID=6211

All applicable federal, state, and local tax laws apply and winners are responsible for paying their own taxes. For winners who are legal residents of the United States, the Internal Revenue Service ("IRS" requires Form 1099-MISC to be issued and filed with the IRS for each recipient of a prize who is a resident of the United States if the value of that prize is at least $600. Reporting and payment of any applicable federal, state, and local taxes is the sole responsibility of prize winner. The approximate retail value of the Full Region prize is $4,540 USD.


Is this for real?

Gambling and/or lottery winnings are taxable to US residents, so presumably, yes.

Definitely on something that large, the US Government would tax it as a prize or gift. Just like the winners on TV game shows, who walk away with large batches of prizes. They owe taxes on every one of those things they won.

Ever wonder why people on "The Price is Right" and other game shows often chose some of the wacky high-value prizes that they are unlikely to use? Those are the ones they will sell or take a cash-equivalent for, to pay the taxes on the rest.

Gifts are not taxable to the receiver, only the sender, and not if they are under $12,000.

Taxes on prizes and gambling winnings vary on value and how they are won. depending on the game $600-$1500 is the reporting threshold and in higher amaounts, taxes are immediately witheld upon payout.

http://www.bankrate.com/finance/money-guides/reporting-gambling-winnings-deducting-losses.aspx

Topic 419 - Gambling Income and Losses

The following rules only apply to casual gamblers. Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income.

A payer is required to issue you a Form W-2G (PDF) if you receive certain gambling winnings or if you have any gambling winnings subject to Federal income tax withholding. All gambling winnings must be reported irrespective as to whether any portion thereof is subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax.

You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction on Form 1040, Schedule A (PDF). However, the amount of losses you deduct may not be more than the amount of gambling income you have reported on your return. It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

I'm just wondering how many did that survey and did not realize you will be taxed if you are chosen.

The majority of US folks do not think about the tax implications of anything until it bites them.

The taxes on it should be paid when the person does their 2009 taxes next year. The actual monthly tier that LL charges will be able to be used -- it is not based on a guess of what tier will be. And the only taxes actually paid will be on the free tier received in 2009, with the rest of it going into 2010 income and that amount might be below the threshold for having to pay taxes --- all depends on when the person gets the island.

Or at least that is how it logically should work, which means that is probably not how it will work.

Haha! We Europeans might have to pay VAT but prizes are generally tax-free, I believe!

-- they must all be really sex deprived.

Which is odd since there are so many public restrooms for them to meet someone. You'd think they'd be getting plenty.

Yeah, but there is just no pleasing them, so no matter how much they get, it is just never enough.

And the only taxes actually paid will be on the free tier received in 2009, with the rest of it going into 2010 income and that amount might be below the threshold for having to pay taxes --- all depends on when the person gets the island.