The Tax Man Cometh - Ye Fetid Few - What Will You Do?

US Tax date is coming soon. How much did you make in SL? How will you report it? If you withdrew it via a Canadian company (GOM), how does it translate into US taxable income?

Better questions:

1. How much did you make?
2. What did you make it on (clothing manufacture, casino transactions, sex animations, etc...)?
3. What special marketing techniques did you use?
4. Will Linden Labs be obligated to report your virtual cash to real cash transactions?
5. Will GOM be obligated to report your transactions?
6. If you used PayPal, will they be reporting on your transactions?

To Note:

IRS is everywhere, this is a pseudo-public forum - post at your own risk.
Posers are amongt us - don't believe everything you read.
Dislosing your SL income may invite competition into your area of specialization.

... Sung to the tune of Tax Man by the Beatles ...

oh no IRS!

1. L$0
2. nuthin
3. not telling anybody about what i make and if they accidentally find out refusing to sell to them.
4. prolly not
5. prolly not
6. dunno

if you build a house, I'll tax the prims.
if you try to hide, I'll tax your sim.
go to a club, I'll tax your hair.
got a new av, I'll tax you bare.
cause I'm the taxman, yeah I'm the tax man,
and you're playing for no one but me.

IRS, ohhh no... I owe taxes anyhow!

*mumbles* Taxes cuts... yeah whatever.

I'll add:

If you gave away money to others in SL, is it considered a charitable gift?

I am actually looking for all this info. for next years return, I didn't actually cash out much in 2004. But 2005... hmmmm. Somebody has to be watching sooner or later.

well yeah if you keep drawing attention to it.

If folks think reporting SL income is a bad idea, consider registering it as a small business.

Suddenly you're able to write off your computer, subscription fees, ISP cost, purchase price of Photoshop, etc etc...

I haven't had to do this yet myself, but it could be a way to save a lot of money.

If you made money, its income. If it is income, it is supposed to be reported. Is it tangible? Maybe not, but income is income, no matter what country you live in, nor the origin of the revenue.

GOM may be Canadian, as am I, but the GST does not apply because Paypal is routed via US funds.

Nice loophole, chalk one up for the little guy!

I dont pay income tax, hah, take that

Consult your tax accountant before doing this, especially if you don't make enough money to cover all of the costs Hiro mentioned. I believe the IRS has guidelines that distinguish between a real business and a hobby and I suspect that if you make a mistake there's an excellent chance you'll get audited.

Oh, I was going to do this. But then, I calculated it as a small unincorporated self-employed business, which I could register in New York if I make over $1000. I'm thinking it actually makes more sense to register it as non-profit and I won't have to report much if I take in less than $25,000 LOL.

But then...I did up the expenses for my small unincorporated business LOL

-- Subscription and land tier fees
-- Days when the game was down and I could take no income -- not reimbursed
-- Time when the teleporter wasn't working to my lands--not reimbursed
-- Cost of houses and other furnishings
-- Cost of land
-- Loss on resale of land blocked by griefers
-- Cost of Pay Pal fees and GOM fees
-- My Billable Hours of Labour
-- Pain and Suffering--who can put a price to it?
-- Extortionist Payments to Griefers
-- Charitable Gifts
-- Contest Prizes
-- ISP and Telephone Fees
-- Computer upgrade cost
-- Poor FPS -- hehehe now I am really going to calculate THAT one high!
-- Drycleaning bills (My accountant always tells me to put this in, whatever)

When I did all that, I began to feel as if I should apply to the government for welfare, not be paying them taxes to make other people's welfare LOL

HAHAHAHAAHAH but it's still fun. It's a game.

didn't make a penny, think I'll inform Wall Street, my stock, which is posted under STM on the NYSE will go through the friggin' roof!!!

Zuzi,

Are you as cute as you are perceptive?

Adoringly,
BB the Exaulted

Isn't there a value-added tax rate of like 17% there? Any consumption tax is better than the current U.S. system.

Here is one for the IRS to ponder.

Let's say you are a woman from some southern U.S. state that still hangs people for sodomy. We'll call it, "Alabama." You fail to report income and the IRS audits you. They have the numbers but need to know how it was earned. Their insider in SL finds out that said young woman is an escort. Oh my! Does the IRS turn you over to the Alabama attorney general's office because she was having cyber sex for hire? Is it OK that she may have been engaged in an unlicensed adult 900 number-esque situation without registering with the secretary of state's office? And, what if it is a guy pretending to be a girl doing that. In the above-mentioned state he'd probably be strung up by the nuts before a trial can take place.

I'm sure we could come up with more for the IRS to ponder but my take on it is that if you received any 'real' currency as a result of this game, it is income. If you are reporting it as income you can list your activities on SL as a work activity, which means you can list expenses such as software and subscription fees (not nachos and beer consumed while playing). Where people get in trouble is when they try to come up with really weak rationale for the expense side.