Interessante: When is a Game Only a Game? The Taxation of Virtual Worlds.
When is a game only a game? To date, articles on the taxation of activities in virtual worlds have not attempted an answer to this question. Instead, they have attempted to formulate rules applicable equally to worlds created solely for entertainment purposes and worlds structured to serve as venues for serious economic activity. This article proposes a bright-line test, at least with respect to the taxation of cash method taxpayers, for distinguishing between these two types of worlds. Transactions in worlds whose currencies are redeemable or convertible, it argues, should be subject to current taxation under standard cash method timing rules, applied in-world. Transactions in worlds whose currencies are neither redeemable nor convertible, by contrast, should not be currently taxable.