Virtual Laws and Taxes

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[Guest.Visitor]

Virtual Laws and Taxes

** This thread discusses the article: Virtual Laws and Taxes **
Anyone fancy a bit of a tea party?

[Guest.Visitor]

Virtual Laws and Taxes

** This thread discusses the article: Virtual Laws and Taxes **
If the government taxes my earnings on neopets.com or "Roller Coaster Tycoon", I will be more than happy to share my virtual earnings and pay them virtual neopet dollars. That is if I am represented. If not, I will fancy a virtual tea party.

[bharder@nlrha.ab.ca]

Virtual Laws and Taxes

** This thread discusses the article: Virtual Laws and Taxes **
Kyle would have to pay taxes on every gain he made, EXCEPT the gain on the house. Since he announced his intent to move into the house, and if he actually did so, he would be covered on the house since that was his principal residence. And the house is likely the largest financial gain in the whole transaction sequence. However I think he has an even better legal and tax argument. All his transactions were barter as I understand the matter. No money changed hands at all. From what I understand, these transactions do not count as taxable transactions. There is apparently a thriving barter subculture, in part due to this reason. Never underestimate the wiles of the taxman though. My favourite rule, if you can call it that, is the General Anti-Avoidance Rule. This essentially says that, if CRA decides that you made a transaction solely to avoid taxes, then they can tax you regardless of any other tax rule. And the best part is that it's the CRA's sole prerogative to make that decision. Judge, jury, and executioner, it's one stop shopping!

[Guest.Visitor]

Virtual Laws and Taxes

** This thread discusses the article: Virtual Laws and Taxes **
In the U.S., business-to-business bartering transactions are taxable. Here's a link to the IRS tax topic 420 http://www.irs.gov/taxtopics/tc420.html. To quote from tax topic 420, "Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of goods and services exchanged must be included in the income of both parties. Income from bartering is taxable in the year in which you receive the goods or services. Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business. If you failed to report bartering income on returns you have already filed, you should correct this by filing an amended return, Form 1040X (PDF), for each year involved. For information on amended returns, refer to Topic 308. A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis. The Internet has provided a medium for new growth in the bartering exchange industry. This growth prompts the following reminder: Barter exchanges are required to file Form 1099–B for all transactions unless certain exceptions are met. Refer to Barter Exchanges for additional information on this subject." Tom.

[H.Boldt]

Virtual Laws and Taxes

** This thread discusses the article: Virtual Laws and Taxes **
Joel wrote: "The truth is that real people are making real money selling fictitious stuff to other real people, and some government types are looking at the possibility of taxing the income on those transactions." Someone has something that someone else is willing to pay money for. When someone pays money for that something, the government wants its cut. What's so difficult to understand about that? Cheers! Hans