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blankseplocked ISK = taxable income?
 
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lordharold


ISD YARR
Posted - 2007.04.11 23:14:00 - [31]
 

Please keep it civil.

-Lord Harold


Waffle House
Posted - 2007.04.12 05:32:00 - [32]
 

They will always have to tax on assets after it leaves the games (sell your isk on ebay). The day governments put real world value on virtual assets is the day games like Eve end. If your POS infrastructure gets wiped out and has REAL WORLD value, then people will use real world law suits for retribution.

Maximillian Power
Minmatar
Legio Immortalis
Posted - 2007.04.12 06:44:00 - [33]
 

Edited by: Maximillian Power on 12/04/2007 06:45:34
Edited by: Maximillian Power on 12/04/2007 06:41:57
Originally by: Crinos Childflayer
1. CCP is very strict about selling ISK for cash. As long as CCP never actually condones this, then they can keep claiming that ISK has no real money value.



And GTC Sales, which constitute a tangible, real life, monetary value for ISK are not condoned? Oh, hold on, isn't there an interface on the internet, implemented by CCP which performs this exact function?

Oh, and, I am not for one second arguing that there is a real life monetary value on ISK, whilst it is ISK, just pointing out the flaw in your argument. The fact is that whilst it is ISK, it is ISK, but if you wanted to you could turn into a real life benefit for yourself, in a CCP condoned way, which muddies the waters a little. If there was no GTC sales then your statement would be true.

Originally by: Crinos Childflayer
2. Some guy, can't remember the details offhand, sued an MMO company when they removed some items from the game and he demanded they give them back as he was going to sell them for currency. In that country, I believe it was an east Asian one, thier laws stated that it constituted real world wealth and the company was FORCED by the government to return the items.

Crazy stuff, huh?



Quite scary actually..

EDIT: Fixed some of the grammar

Akita T
Caldari Navy Volunteer Task Force
Posted - 2007.04.12 08:45:00 - [34]
 

Originally by: Maximillian Power
And GTC Sales, which constitute a tangible, real life, monetary value for ISK are not condoned? Oh, hold on, isn't there an interface on the internet, implemented by CCP which performs this exact function?

Do you even KNOW how this new "secure GTC transfer" works ?
The GTC is automatically applied to the buyer's account, so there's absolutely no resale potential.
So, while you can pay ISK (to somebody else) to get extra subscription time (which he pays for you via the GTC he bought), you can't (using CCP-sanctioned methods) exchange ISK for real-life money.

You can try to buy GTCs in "unsecure" ways using ISK, and you can try to seless those GTCs for real-world money, but there's no guarantee that the code will actually work in the first place (ok, you can verify it soon after you got it, but that's it), and there's no guarantee the initial seller won't be using it before YOU get to resell it further.

And to make matters sweeter for the regular player (and sour for the RMTers), if you scam people out of ISK *and* GTC-related subscription time when NOT using the secure GTC trade, it's all ok in the eyes of CCP. And the player community too, to be honest.

Maximillian Power
Minmatar
Legio Immortalis
Posted - 2007.04.12 09:39:00 - [35]
 

Edited by: Maximillian Power on 12/04/2007 09:40:44
Edited by: Maximillian Power on 12/04/2007 09:37:31
Originally by: Akita T

Do you even KNOW how this new "secure GTC transfer" works ?
The GTC is automatically applied to the buyer's account, so there's absolutely no resale potential.
So, while you can pay ISK (to somebody else) to get extra subscription time (which he pays for you via the GTC he bought), you can't (using CCP-sanctioned methods) exchange ISK for real-life money.



And do you even understand the basics of economics?

If I run 5 accounts, because I <3 eve so much, then I have to pay for them with RL money. It costs me 15 per month, per account totalling to (15 * 5 * 12) = 900 in a year.

Now, pre GTC sales I had to pay for all of that using RL money, but, I'm pretty good at Eve and a few billion ISK is nothing to me, so, I pay for all five accounts using ISK. This has saved me a cool 900 in real life money. You are telling me that this is not income???

Don't quote me, and try to deride my opinion, if you don't know what you are talking about. I've got no problem with you providing a rational measured argument, if you've got one.

EDIT: Added a comma
EDIT: Also, the me used above is a fictional me, used for illustrative purposes and to add a little "bounce" to the scenario. I actually have one account only, although if I had the time I would consider more.

Dread Phantom
Caldari
End Game.
Posted - 2007.04.12 10:01:00 - [36]
 

So not buying something is an income?

PottseyTest123
Posted - 2007.04.12 10:07:00 - [37]
 

Originally by: Maximillian Power
If I run 5 accounts, because I <3 eve so much, then I have to pay for them with RL money. It costs me €15 per month, per account totalling to (15 * 5 * 12) = €900 in a year.

Now, pre GTC sales I had to pay for all of that using RL money, but, I'm pretty good at Eve and a few billion ISK is nothing to me, so, I pay for all five accounts using ISK. This has saved me a cool €900 in real life money. You are telling me that this is not income???


This is a thread about taxation, not about money saved/earned. Or at least that's the impression I got. Correct me if I'm wrong.

As somebody else said it already, tax-wise, EVE subscription payments, even internet fees and the price of the computer(s) you use to play EVE on are DEDUCTIBLE incurred costs (last ones depending on percentage usage for EVE vs other tasks). This means any real money spent and even "taxable" in-game ISK spent (in real-life cash equivalent) would get substracted first, before deciding on how high your tax should be.
In other words, for IRS-like tax-collector purposes, it makes no difference wether you spent 5 * 150 mil * 12 = 9 bil ISK or 900 USD (or Euro), it's the same for them, IF they ever decide in-game ISK "revenue" can be taxed.


Now, we come to the second part of the problem.

CAN you actually acquire those 9+ bil in-game ISK via 5 accounts by spending LESS real-life time valued (for you) at 900 USD (or Euro) ? For me, 900 Euro is about 60 hours of real-life work (well, a bit more after taxes and other costs, say 120 to make it a nice round number later). So, basically, can you earn more than 9 bil ISK in one year using 5 accounts and working less than 20 minutes a day on average (4 minutes per account per day on average) inside EVE or not ? If you can't, then you actually are at a loss, because that time would have been better spent working in real-life overall. Doesn't matter if those "25 hours per account" are front-loaded or not (like, I don't know, gring for research agent standings 3 days in a row, 8 hours a day, and then just cash in the datacores regularly), it matters how you end up overall in time used vs potential revenue.

What you describe here is not actual income, but instead is reduced costs.
For it to be actual income, you'd have to be able to cash in those ISK as real money.
As, you know, nobody forces you to play on 5 separate accounts, and statistics say less than 20% of EVE players have a second account (let alone more than two).

For me personally (you might have a different situation), for EVE to become comparable to my real-life job, I'd have to earn AT LEAST 1 bil ISK per day of maximum 10 hours inside EVE to even begin to break even... and a lot more to be even a bit more profitable.
So more akin to 1.5+ bil per day, regardless of how many accounts are involved. Sure, it's possible, but would I like EVE as my job ? I really, really doubt that.

And then again, you're back to the first problem : HOW can you cash in your ISK for real-life money ?
Answer is, you can't, not officially (and therefore not safely).

And even if you could, hey, now taxation MIGHT kick in, and you'd have to earn over 3 bil ISK a day to break even.
Talk about nasty.

Maximillian Power
Minmatar
Legio Immortalis
Posted - 2007.04.12 10:18:00 - [38]
 

Originally by: Dread Phantom
So not buying something is an income?


Wikipedia -- w00t

Originally by: Wikipedia (and somewhere else before that)

Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.



You can view it in different ways, different people will always have different opinions on what is a liability and what is an asset etc.

The fact is that a person can, using ISK earned in game, make a net gain in RL monetary terms, by using that ISK to buy a subscription to eve.

Should ISK be taxable - IMO, NO, as, in and of itself, it is not a monetary asset, however, an argument can be made to the contrary as described

Should the monetary gain made by paying for your account with ISK be taxable - IMO, YES, and by making it taxable (which it is in the US I believe from previous posts), it negates any monetary value of the ISK itself as the single avenue which is available to turn the ISK into a RL asset is already taxed.

Draw your own conclusions (I have to do my RL work, to pay for my RL subscriptions now ;) )

Dread Phantom
Caldari
End Game.
Posted - 2007.04.12 10:27:00 - [39]
 

Originally by: Maximillian Power
Originally by: Dread Phantom
So not buying something is an income?


Wikipedia -- w00t

Originally by: Wikipedia (and somewhere else before that)

Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.



You can view it in different ways, different people will always have different opinions on what is a liability and what is an asset etc.

The fact is that a person can, using ISK earned in game, make a net gain in RL monetary terms, by using that ISK to buy a subscription to eve.

Should ISK be taxable - IMO, NO, as, in and of itself, it is not a monetary asset, however, an argument can be made to the contrary as described

Should the monetary gain made by paying for your account with ISK be taxable - IMO, YES, and by making it taxable (which it is in the US I believe from previous posts), it negates any monetary value of the ISK itself as the single avenue which is available to turn the ISK into a RL asset is already taxed.

Draw your own conclusions (I have to do my RL work, to pay for my RL subscriptions now ;) )


So no

Bienurdau Hywoaf
Minmatar
Matari Holo News Network
Posted - 2007.04.12 10:33:00 - [40]
 

Actually if you paid for your account with isk, then yes that would be considered income under USA law. Now it could also be considered income under some other countries laws.

In essence you are using the isk to offset the subscription costs. So in essence you are gaining revenue equivalent to the cost of the subscription you are offsetting with the ISK. I doubt many folks report it, but yes legally it is considered revenue.

Similarly most folks don't report it but if you sale things on Ebay and make a profit off selling it, then you are generating revenue. Which likewise is taxable though highly underreported. Doesn't matter if the goods are virtual (which until recently were allowed to be sold on Ebay) or real.

It is likely countries as they look for more revenue will look more closely at these games, attempting to find some means of taxing them. It is almost inevitable. To many folks put as much time in them as a full time job for the governments to continue to ignore them.


Dread Phantom
Caldari
End Game.
Posted - 2007.04.12 10:41:00 - [41]
 

but you arn't paying with isk, someone else is paying, and they are paying the tax too

Roshan longshot
Gallente
Ordos Humanitas
Posted - 2007.04.12 10:53:00 - [42]
 

Originally by: stapler man
ok so i found this article on some guy who filed selling video game assets as his main source of income, and he paid income tax for it. if the IRS starts taxxing me for flyin anround in a navy issue raven im gonna be extremely ticked off >< http://www.legalaffairs.org/issues/January-February-2006/feature_dibbell_janfeb06.msp


By useing the information you provided...HE filed a 1099 saying that HIS ONLY income was selling video game assets...Ok that is taxable. Unless Eve online is your only job and you sell Navy issue ravens on a daily bassis for real life cash...then no they wont tax you. Which inturn means this entire topice has been a waste of time.

BUT I almost forgot...THIS IS ONLY THE FIFTH TIME this topic has been brought up.

NO the IRS will not and can not tax virtural income. They can and WILL tax you on virtural income sold for real life cash.




Gaogan
Gallente
Solar Storm
Sev3rance
Posted - 2007.04.12 14:17:00 - [43]
 

Ignore all the idiots shouting that the sky is falling. The truth is very simple:

You sell stuff ( be it in game items or otherwise ) for real world money, you made income and pay tax. It doesn't matter if you are selling sex, drugs, and rock and roll, you got paid, you owe taxes. Playing the game for fun and NOT getting paid is NOT taxable.

Marketcheck2
Posted - 2007.04.12 14:33:00 - [44]
 

Originally by: Gaogan
Ignore all the idiots shouting that the sky is falling. The truth is very simple:

You sell stuff ( be it in game items or otherwise ) for real world money, you made income and pay tax. It doesn't matter if you are selling sex, drugs, and rock and roll, you got paid, you owe taxes. Playing the game for fun and NOT getting paid is NOT taxable.



If you give isk for something of real world value (GTC) did you just make money while gaming?

Think about it.

If you think there isn't someone out there wondering how to tax this you haven't been around long enough.

GeekWarrior
Posted - 2007.04.12 14:55:00 - [45]
 

Um no. Ain't gonna happen. ISK is not real. CCP's EULA takes away any LEGAL valuation of it. If the IRS attempts to tax ISK/IG items that would be like them taxing the sale of illegal drugs. WTF?

RedFall
Irreligion
Posted - 2007.04.12 15:02:00 - [46]
 

Originally by: GeekWarrior
Um no. Ain't gonna happen. ISK is not real. CCP's EULA takes away any LEGAL valuation of it. If the IRS attempts to tax ISK/IG items that would be like them taxing the sale of illegal drugs. WTF?


If enough people started using coined rat poop as currency, then it would be taxed. It doesn't matter that CCP said it doesn't exist. If people use it in the exchange of goods and services, even if they are just pixels, then it can be taxed.


Syrann
The Praxis Initiative
FREGE Alliance
Posted - 2007.04.12 15:12:00 - [47]
 

So how's this for a solution. Every game they tax, witholds a proper percentage of any income earned, be it ISK, ORE, Mods, etc. Come tax time, they can pay the IRS in ingame currency, and if the IRS wants to try and trade it for real money - they can ban them!

Bunk, but still an amusing thought.

Jacques Archambault


ISD YARR
Posted - 2007.04.12 19:20:00 - [48]
 

Please keep your replies free of the discussion of politics, as this is not permitted on the forums. Past experience has shown that this form of disussion leads to a great deal of people getting upset and flaming each other.

Also, if you have any questions/comments regarding forum moderation, please email the forum moderator team at mods@ccpgames.com.

Thanks!

-Jacques

Roshan longshot
Gallente
Ordos Humanitas
Posted - 2007.04.12 19:25:00 - [49]
 

Edited by: Roshan longshot on 12/04/2007 19:23:02
Hey redfall that sig is a nasty one...gives me a headache trying to catch everything in it.

Edit: Did I see "Nerf ISD"????







RedFall
Irreligion
Posted - 2007.04.12 19:28:00 - [50]
 

Edited by: RedFall on 12/04/2007 19:30:16
Originally by: Roshan longshot
Edited by: Roshan longshot on 12/04/2007 19:23:02
Hey redfall that sig is a nasty one...gives me a headache trying to catch everything in it.

Edit: Did I see "Nerf ISD"????


NO!!!! Never nerf ISD.






Sensor Error
SensorTech Industries
Posted - 2007.04.12 19:32:00 - [51]
 

Why do you think they don't allow ebay sales? if you don't officially acknowledge the price of your currency, how can you decide what level to tax it?

shady trader
Posted - 2007.04.12 21:14:00 - [52]
 

Originally by: BallsSnatcher
Alot of countries, are starting , make it illegal to buy virtual stuff w/ money and vice vesa. I know in chine is a crime against the govement.

since is messes up the economy with foreign money, and alot of money thats not taxiable.

Also selling game assets w/ money are agains most games polices and they can take the money from you. In court.
There was a guy on Lineage2 Some boss ,for chinese farmers, well his house got raided, they took all his money, his stuff and put him in jail for like 10 years.



If more contries bring in laws like this, could it be part of the solution to Farming? Instead of banning the accounts report them for suspected tax fraud? Very Happy

Or will some governments mandate that game creaters have to file tax returns on your behalf showing how much you have earned in game as well as you have to use your real name and ID number to register to play the game.Crying or Very sad


The Main problem with Govenments forcing a link between in game currency's and real ones is simple. The guiding Hand and a few others would be facing jail time for thief, conspiriacy to comit thief and others as the money has effectively moved bank accounts into differant countrys (as far as the tax man is consurned) after there successfull enfiltration of corps then robbing them blind. Destroy some one ship and they could sue for damaging there properlty, loot it and you have just comitted theift you do you for.

Entopia universe did make a change to the loot system as a result of the US banning oversea's gambling. They were worried that the US would take action agianst them.

Also I know a fairly resent player who is making a nice profit in EU and has not sunk that much into the game. He mades his money out of mining amps after getting luck with a rare BP)


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