Chris Kohler
Culture

The Virtual Taxman Cometh

Clive Thompson’s column on the front page this week deals with an issue that just won’t go away — whether or not virtual dollars will end up being taxed by the IRS: Almost everyone agrees these days that if you "cash out" — and sell a valuable avatar or big stash of gold on eBay, […]
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SlClive Thompson's column on the front page this week deals with an issue that just won't go away – whether or not virtual dollars will end up being taxed by the IRS:

Almost everyone agrees these days that if you "cash out" – and sell a valuable avatar or big stash of gold on eBay, exchanging virtual goods for real greenbacks – you owe taxes on the profit. That's not news.

But what about stuff that stays inside the game? If you played WoW
for three years and racked up $4,000 worth of avatars and gold, but never cashed out – should you still be paying annual taxes on your increased value, as if it were income? This is where the rubber hits the road, because the profits currently locked up inside these worlds are becoming big enough – hundreds of millions at least, and maybe billions – that they are a juicy target for the IRS.

The Virtual Taxman Cometh [Wired]