Tim Marman's Loosely Coupled

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• Taxing Virtual Economies?

  A congressional committee is exploring the idea of taxing in-game virtual economies . This is not a tax on the sale of video games themselves ( especially violent ones ), nor is it a tax on the sale of virtual assets in a real market like eBay. As Mike explains: Note that the politicians aren't talking about virtual items in the game that have been converted to real dollars or other assets. That's already taxable as income. Instead, they're looking at actually taxing the items within the game based on the perceived value of those assets. The complexity in even attempting such a system should be obvious. Different games have different economies and different currencies, and unless those currencies are convertible to real dollars there is no (easy) way to set the tax basis for the income. If the virtual assets are not readily convertible, this would be what is known as "phantom income" - that is, income in the eyes of the IRS but not in your pocket. This is a common topic with stock grants... Posted Oct 18 2006, 11:44 AM by Tim with | with no comments Filed under: Technology, Intellectual Property, Rants, Gaming