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Ridge Cronon
Registered User
Join date: 13 Sep 2006
Posts: 59
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10-19-2006 09:05
I see the statistics on business profit and wonder how they are accumulating that data. How are they determining what profit is? Is it any time that L$ exchange hands in SL? They are most likely excluding those who purchase L$ themselves as this is not profit.
Anyone have an understanding of this process?
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Jeremiah North
Pair of Ducks Solver
Join date: 5 May 2006
Posts: 198
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10-19-2006 10:13
This is just a WAG (wild avatar guess), but maybe they just track people cashing out US dollars to Paypal or check as profits. Obviously this would be gross profits. There is no license to have a business in SL, so anyone cashing out could be seen as a profit for a "business". a bit
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Blogging about Second Life at http://jeremiahnorth.blogspot.com
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Dregan Mathys
DMI Creativity
Join date: 1 Dec 2005
Posts: 12
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SL Business and taxes
10-19-2006 12:50
Personally Our group cashes out Lindens as profit and uses tier payments and other fees as offsets.
It is a smart idea to declare any profits made in SL as the IRS will go back years if you do not. Our corporation was audited last year and we were notified that we are liable for taxes here in SL
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Doubledown Tandino
ADULT on the Mainland!
Join date: 9 Mar 2006
Posts: 1,020
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10-19-2006 12:53
I think the numbers just regard lindens changing hands... any transaction whatsoever.
Also, I think stipends received are included in that
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Ricky Zamboni
Private citizen
Join date: 4 Jun 2004
Posts: 1,080
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10-19-2006 13:00
From: Dregan Mathys It is a smart idea to declare any profits made in SL as the IRS will go back years if you do not. Our corporation was audited last year and we were notified that we are liable for taxes here in SL Please explain further. Are you saying you didn't declare cash you had converted from L$, or that they were interested in *everything*, regardless of what you had cashed out? |
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Doubledown Tandino
ADULT on the Mainland!
Join date: 9 Mar 2006
Posts: 1,020
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10-19-2006 14:02
It's still a big ol grey area... but my advice is simply to report your profits for the year to the IRS (if it is over $600USD). AND, claim deductions - the expenses - the money you spent to make that money.
And my opinion on this is that linden$ is not money, but rather a business expense. linden$ are an investment and a cost of doing business.
when you cash out your lindens, thats the money. When you buy lindens$ you're spending money to invest in something that you will need for your business.
It seems fairly simple to me. You will have receipts of the money you spend for SL (including land, tier, buying stuff, & buying lindens).... and you will have receipts for the money you have made by the profits appearing in your paypal.
I have a feeling this is what congress will go for... and I'm also fairly sure a lot of us will buy crazy amounts of lindens just before a fiscal year ends.
It's all up in the air with the gov't at this point... but basically follow the tax rules:
report any income
deduct any expenses
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