RE: IRS Taxation of Online Game Virtual Assets Inevitable
Dec 4th, 2006 by Brian A. Thomas
A senior economist on Congress’ Joint Economic Committee, Dan Miller, says that it is just a question of when, not if, that people will be taxed for virtual assets, even if they are not converted to actual cash.
Let’s say you play World of Warcraft. Your character wins a sword with x number of virtual dollars. If you sell that sword to a trader, your character, gets this virtual dollars to buy other virtual items. Virtual, not real, fake… This guy says that the government should tax that transaction.
Since some people reading this might not understand let’s dive deeper into the insanity. The nearest equivalent would be the Monopoly board game. You own Boardwalk and Park Place, and somebody lands on it and they have to pay you the fee. If this was a virtual, online world, you would have to pay an income tax on that, even though it is fake money.
Full details here.
Now of course, this isn’t the IRS or Congress saying they are going to do it, yet, this is just an adviser.
I wonder if one can argue that the virtual character has no representation in Congress and therefore can’t be taxed? Probably not… since the income tax is illegal as it stands and you can’t get away with not paying it…
