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Taxation Policy In Virtual Worlds: Issues Raised By Second Life And Other Unstructured Games, William Terando, Brian Mennecke, William Dilla, Diane Janvrin
Taxation Policy In Virtual Worlds: Issues Raised By Second Life And Other Unstructured Games, William Terando, Brian Mennecke, William Dilla, Diane Janvrin
William D. Terando
Massively Multiplayer Online Economic Games involving the creation and trade of virtual goods are rapidly gaining in popularity. Although most individuals participate for their own social or entertainment purposes, a substantial number of participants rely on the sale of virtual goods as an important source of real wealth. To date, these economic returns have largely escaped taxation due to the lack of a well-developed body of tax law in this area. This paper examines whether and when taxes should be assessed on virtual world income. We conclude that an in-game sale of a virtual asset constitutes an income realization event …