Why might a taxpayer be confused about whether transactions involving virtual property should be reported as taxable income.

Income, broadly defined, is subject to tax.
Although the IRS has not issued any guidance directly addressing these difficult questions, a individualis generally taxed immediately upon ll income from whatevercause derived.Income is defined broadly as any ndeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.Moreover, a individualis generally subject to tax upon finding or earning money or treasure, winning a lottery, prize or award, stealing property, or trading one piece of property for another, potentially heading some to

While some of us may find the thought of having our equipment taxed laughable, the sad truth is it could actually happen. Congress is always looking ways to bring in more revenue and our little virtual worlds might be next. Could being uber put you in a higher tax bracket? There have been some questions brought up about this sort of thing that may work for the regular gamer or against them. I mean, if Congress had to choose whether to tax something or not, they might side with regular gamers not making any money off the stuff. Right? Ok that was a stupid question.

What are some of the tax issues that virtual worlds raise?
Virtual world transactions raise a number of tax questions. For example, is a individual subject to tax each time he or she acquires virtual property? How about when the individual exchanges one virtual property for another, or for virtual currency? How about when the user sells the virtual property or his or her account (and avatar) for real money? What, if any, information reporting, withholding, backup withholding, and recordkeeping requirements apply to these transactions? Similarly, difficult questions may arise in connection with the tax obligations of virtual world operators.