Is it Real? Is it Money?

Via Ann Bartow's Sivacracy comes a tale of legal and financial limbo:

....In the course of this project, I made a total of $11,000 selling on eBay the items I won playing a game called Ultima Online, $3,900 of which was in the final, most profitable month. I reported my profit to the IRS, and I paid the requisite taxes. But after I did so, a troublesome set of questions continued to nag at me—for which even IRS publication 525, entitled "Taxable and Nontaxable Income," couldn't provide answers.

This was remarkable, for publication 525 would appear to contain every conceivable form of income known to accounting. To read it once is to realize that you know nothing about income. Here you'll find a description of gains, ill-gotten and otherwise, so irregular that they can be taxed only according to that form of guesswork known as fair market value. Here are stocks, options, retirement watches, and stolen goods ("If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner").

Most significant for my purposes, here too are items acquired either through barter or as prizes in a game. The rules make clear the IRS's fundamental point: Goods taken in trade or won at play are taxable the moment they fall into somebody's hands, even if they are not sold for money. The more I read, the more I wondered whether reporting the amount I had brought home from selling virtual items on eBay was enough to satisfy the IRS. ....

We'll skip over the "I'm in the wrong line of work" wailing for now and go right to speculating about how wierd the tax laws regarding virtual properties are going to look...

There's other ways in which the on- and off-line worlds collide, productively but complicatedly: new academic discussions which include practitioners (some of whom are academics) and theoreticians of a wide variety of disciplines.

Finally, some actual satire, for those of you who remember the single-person, text-only game Xyzzy (sometimes known as Zork, apparently). I played it on ... what was it... a Heathkit, which my parents built. Anyway, here's the George W. Bush edition [via].