Death & (Virtual) Taxes

Virtual worlds are now producing real millionaires. Two weeks ago, Ailin Graef announced that her avatar inside Second Life had amassed virtual-property holdings worth $1 million in U.S. funds. She started two-and-a-half years ago with a $10 account in the online 3-D world — then parlayed her design skills to amass in-game capital. Graef owns 36 square miles of Second Life property, a couple of virtual shopping malls and several in-game brands. That’s not bad pin money for online play. It has made many online gamers wonder if they could become the next in-game Donald Trump. But it’s got tax lawyers wondering when the IRS will show up. If you make a boatload of profits inside a game — will the taxman soon want his cut?

Read this article from WIRED, plus Who governs virtual worlds? and IRS taxation of online game virtual assets inevitable from C|Net and three blogs pondering the same question from ZDNet.

So, are virtual assets real enough to consider taxing?
-From Megs to Riches from CNN / Money.com
-The Virtual Rockefeller from CNN / Money.com
-My Virtual Life from BusinessWeek
-Virtual World, Real Money from BusinessWeek
-Virtual magnate shares secrets of success from C|Net
-’Project Entropia’ real estate sale fetches $179,000 from C|Net’s Gaming blog
-IBM, Circuit City go prospecting in virtual world from C|Net
-It may be just a game, but it’s serious business from MetaFilter

Previously from WNM: The (virtual) taxman cometh not. Yet., A Second Life; a lot like the first and Griefing attack on Second Life celebrity brings up copyright questions

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