If you play WoW, Eve or any other game with currency you now owe taxes!!!

[User705]

In the US the IRS ruled bitcoin a virtual currency that is property.  If miners owe taxes at the time of creation it stands to reason that you now have to account for all the in-game money you earn at the time of earning it.  Probably in game items as well.  Before all the smart asses start screaming bitcoin isn't wow gold read the irs notice.  It makes no distinction between "virtual currencies".  Furthermore wow gold, eve isk, etc... gets sold for fiat all the time and has a market price just like bitcoin.  Now most game TOS claim that all items belong to the company.  Maybe the company owes taxes or perhaps they will need to collect social security numbers from everyone and send them a 1099.  Of course that's idiocy but welcome to government. 

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[Jacko]

This is really going to be interesting.

Thanks for putting this out.

[pungopete468]

This is technically true.

[bitcointaxes]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

[Swordsoffreedom]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

Actually it sort of is complicated by geography because there were a lot of WOW gold miners in China if I recall correctly so selling WOW gold in the US would be subject to the tax but not in China.

Then again how are they going to prove it anyways

[nitehawk]

Oh wow.. now there's a interesting spin.. using that same logic.. station cash ..goblin gold, and what ever game sold ( cash for in game currency ) is in that list as well ..

[User705]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

How does wow gold have no market value?  It has exactly the same value as bitcoin.  It's valued at whatever two people decide it is.  If blizzard owns it then by the irs ruling they owe tax when it was created.  They also likely need to report it when they transferred it to a players control.  Maybe they need to register as a money transmitter.   Obviously all of this is idiocy but so is calling bitcoin property.

[nitehawk]

and considering blizzard has sued and won cases against gold farmers and sellers..


but lets take blizzard out of  it. pick any free to play game,  Clash of clans, everquest, everquest 2, Starwar the old republic... . all of them have currency you have to buy with real cash to use in game ( ring a bell??) and it has an established value as they set a price for it.  Are they now required to pay taxes on that?  if no why not? its generated currency ( just like bitcoin) it has a value ( just like bitcoin) what makes that different?

[stickerzlab]

If I follow you guys gta V dollars too...

what makes that different

There is not bankster lobbies trying to kill them... And gov doesn't give a sh** maybe because market cap is so small that's ridiculous to make a law for them... (That's just an opinion, Idk how much they represent as market cap..)

[Wilikon]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

Actually it sort of is complicated by geography because there were a lot of WOW gold miners in China if I recall correctly so selling WOW gold in the US would be subject to the tax but not in China.

Then again how are they going to prove it anyways

Simply let the IRS audit the company and every single WoW account.

[zero3112]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

How does wow gold have no market value?  It has exactly the same value as bitcoin.  It's valued at whatever two people decide it is.  If blizzard owns it then by the irs ruling they owe tax when it was created.  They also likely need to report it when they transferred it to a players control.  Maybe they need to register as a money transmitter.   Obviously all of this is idiocy but so is calling bitcoin property.

This is getting interesting. There are black markets to trade WoW gold I wonder why not have been considered money launders. Alot of bitcoin market got shut down because of this.

[Wilikon]

This is technically true.

It really isn't. You don't own WoW gold (which has no market value) and it is just a parameter of your account, which is wholly owned by Blizzard.

How does wow gold have no market value?  It has exactly the same value as bitcoin.  It's valued at whatever two people decide it is.  If blizzard owns it then by the irs ruling they owe tax when it was created.  They also likely need to report it when they transferred it to a players control.  Maybe they need to register as a money transmitter.   Obviously all of this is idiocy but so is calling bitcoin property.

This is getting interesting. There are black markets to trade WoW gold I wonder why not have been considered money launders. Alot of bitcoin market got shut down because of this.

Why not looking into the case of REAL launderers using REAL washing machines?

http://nymag.com/news/features/tide-detergent-drugs-2013-1/

Should the company making Tides register as a money transmitter based on that IRS bitcoin ruling? Or is it FinCen now? This ruling should be applied to ALL and every single case described and should be pushed instead, not banned, to make everyone follow that ruling to the IRS letter.

[Bit_Happy]

Please, leave the play money alone; BTC is real money.....uh property.

[BitOnyx]

Government would try to tax everything sooner or later. I'm not even surprised but good luck trying to execute such law.

[Wilikon]

Please, leave the play money alone; BTC is real money.....uh property.

According to the IRS BTC is play money... uh property.

I would believe the lawyers among us can see this ruling is not fair as it does not bring everyone on the same level, evil WoW tax evaders included 

[Bit_Happy]

Please, leave the play money alone; BTC is real money.....uh property.

According to the IRS BTC is play money... uh property.

I would believe the lawyers among us can see this ruling is not fair as it does not bring everyone on the same level, evil WoW tax evaders included 

Who has the money to drag FINCEN and the IRS into the same court?
They need to settle FINCEN claiming it's money vs. IRS saying property.

[Wilikon]

Please, leave the play money alone; BTC is real money.....uh property.

According to the IRS BTC is play money... uh property.

I would believe the lawyers among us can see this ruling is not fair as it does not bring everyone on the same level, evil WoW tax evaders included 

Who has the money to drag FINCEN and the IRS into the same court?
They need to settle FINCEN claiming it's money vs. IRS saying property.

That should be live on TV. I would watch it.

So Bitcoin the protocol and bitcoin (the ex currency) are both properties? Then TCP/IP is a property.

[User705]

Decided to calculate how much all of WoW gold is worth.  Currently there's around 7 million players.  At it's peak there were 12 million players.  Even if the average holdings are worth $50 which seems low it's much higher then total value of all litecoins right now and would've been comparable to all of bitcoin just a year ago.  Interestingly no regulation seemed needed at that time for WoW gold.  How's that for perspective.

[brokedummy]

You owe taxes at time of creation? I thought it was only when you converted to fiat. What if I mine a coin with no buy orders?

[edmundedgar]

I guess this thread is intended as a reductio ad absurdum, but it really isn't. If you were running a business making virtual goods and selling them in WOW and a lot of your assets were in WOW money, and the value of that money changed, that absolutely should be reflected in your accounts, and it absolutely should affect the amount of tax you owe. Arguably WOW gold should be currency not property, but then the same issue still shows up if you're buying and selling virtual property (say you're a Second Life land baron) which obviously isn't currency, but needs to be accounted for somehow, at least when you start dealing with hundreds of thousands of dollars worth of it.

What seems to be a bit mad in the US is that the tax system seems to have been made deliberately cumbersome, thanks to an unholy alliance of left-wingers who don't like loopholes that they worry rich people will find ways to abuse, right-wingers who like taxes on everyone to be visible and infuriating to encourage people to vote to keep taxes on rich people low, and lobbyists who profit from the current system, for example by selling tax preparation software.

In a lot of developed countries people in normal jobs hardly interact with the tax system at all. In Japan, the employer files most of the paperwork, so you just have a single bit of paper once a year that you give to your employer saying how many children you've got etc, and that's that. To avoid a theoretical (and unenforceable) liability for small capital gains (like the one you make when you buy a cup of coffee with bitcoins) normal countries make the first few thousand dollars tax-free so that if you make a lot of money you have to report it and pay tax on it, but you don't have to waste your and your tax office's time declaring piddling little amounts of money that cost more to collect than they actually raise.

If you're in the US and you'd like to do something about this you could start by following up and voting against the legislators responsible for killing this proposal:
http://www.propublica.org/article/republicans-and-dems-come-together-to-keep-irs-from-competing-turbotax
You'll have to do a bit of homework to get this right, because the status quo is the result of a long tradition of bi-partisan twattery, and the party labels aren't always a reliable guide.