Tax/Legal Ramifications with RMAH?

[Kanx]

Looking at the email i received today, there is a field entitled: "Applicable taxes" (£0.00); so perhaps there is something in place?

[ZeroEdgeir]

Provided you specify to pay out your earnings TO Paypal, yes, the money you earn from RMAH sales is actual income.

If you send it to your Battle.net Balance, it is there until spent. No way to cash out AFTER. It is basically virtual currency that can only be used within a specific business. It's like Canadian Tire money (for those who know what it is): No value outside the company you get it from.

[Magjee]

Looking at the email i received today, there is a field entitled: "Applicable taxes" (£0.00); so perhaps there is something in place?

No applicable sales tax.

Your personal income tax is different, check with an accountant.

[alturic]

http://www.moolanomy.com/1126/do-you...lling-on-ebay/

And yes, you do have to pay taxes on eBay income…at least by law you do. However, eBay does not issues 1099′s and they do not report sales to the IRS. Most people who sell a few things probably don’t report it, but if you start selling a lot, I would most certainly claim it on my taxes.

I don't understand tax laws outside of what TurboTax says I have to pay/get back, but I'm really surprised that by law sites that deal with money don't have to submit things like that to the IRS. I'm confused as to why a site like PayPal sends things to the IRS while sites like eBay wouldn't?

Edit: I was under the assumption (regardless if people do it) that technically anything you sell was "taxable" in the eyes of the government. Sure people don't report garage sales, flea markets, and the like but technically I thought it was something that was "required" because a transaction took place.

[Nocuous]

Massive company like Blizz has lawyers and specialists far smarter than you. They have all their bases covered.

Blizz won't make items and sell them either. Even if they do, so what? Other games sell items and characters and nerf/buff them all the time.

“Knowing a great deal is not the same as being smart; intelligence is not information alone but also judgment, the manner in which information is collected and used” Dr. Carl Sagan

History is full of smart people (and companies) making dumb decisions...I seriously doubt they have all their bases covered as you claim. I am sure many great companies have thought their bases covered just before they crashed and burned.

[alturic]

“Knowing a great deal is not the same as being smart; intelligence is not information alone but also judgment, the manner in which information is collected and used” Dr. Carl Sagan

History is full of smart people (and companies) making dumb decisions...I seriously doubt they have all their bases covered as you claim. I am sure many great companies have thought their bases covered just before they crashed and burned.

Heh, it's funny you say things like that because sometimes it's "smarter" to pay the fine than it is to commit the crime. What I'm saying is that the gains from doing the "illegal" transactions are sometimes less than the money earned from doing them. It's kinda fucked up actually.

[Firecrest]

If someone makes $600 or more a year through Blizzard, Blizzard must report this to the IRS and to the individual (Form 1099).

You're confusing "through" with "from". If Blizzard were paying people, then what you say would make sense. The money would be coming FROM Blizzard. We would have to provide Blizz with a W9 and we would be 1099'ed at the end of the year. In this case though, Blizzard has not hired us. They are not paying us. Other people are paying us. The money is coming from them, THROUGH Blizzard, to us.

An argument could be made that if someone had decided to make a living through the RMAH and had established a Tax ID for that purpose, if you purchased more than $600 per year from that person THEY would be obligated to 1099 you. Despite the malevolent lean you've given however, the IRS is not without reason. The unreasonableness of this situation (not to mention the tininess of the dollar amount we're talking about here) is something that would be taken into account.

So, as it stands, your basis here is incorrect. Take it from someone who knows. You're doing our profession a disservice with this misrepresentation.