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Thread: Death of Gemstone

  1. #31
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    Quote Originally Posted by Suppa Hobbit Mage View Post
    I love the rationalization, Whirlin. Very logical and I'd suggest this would be true were you speaking of a for profit entity. The government is clearly not in that camp.
    While true for more service oriented elements of the government, IRS itself is more gap motivated than other organizations, and is the only (that I'm aware of) organization that returns a net profit per dollar spent in their compliance operations. While approximately 10-15% audits are truly random, a majority are risk rated based upon the risk scoring done by evaluating current versus past revenues and expenses, quality of living relative to expenditures, and other elements. Mostly because their efforts are to drive compliance. With the amount of ambiguity in the tax code, per my materiality discussion earlier, they don't want to go into nitpicky debates, they want to go after the slam dunk, easy work, so they'll only focus on the biggest indefensible. It's not worth the time/energy if it progresses to tax court/etc.

    This come across as projecting, but this was based on lessons I was taught in an IRS Audits, Methods, and Process class I took for my master's degree taught from an ex-agent who had retired only 5 years prior. I also just did some quick googling to see if there was more information, and I could see risk factors being referenced in multiple areas. The class was a decade ago at this point, and I'm sure %s of randomness and risk factors have evolved, but to the best of what I've read/observed, the overarching methodology has remained consistent.


    >forage for snapdragon stalk
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    1/6/2014: Setheve completes the promotion ritual and says, "Congratulations, Whirlin, for achieving Guild Master status! We trust you'll serve your guild well."
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  2. #32
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    Quote Originally Posted by ~Rocktar~ View Post
    Pretty sure mortgage and utility companies are not keen on taking Bitcoin.
    Yet.

    Also, if you’re using gemstone to pay the bills…. ��
    Last edited by SHAFT; 01-06-2022 at 03:26 PM.

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    You could just pay taxes on it

  4. #34

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    Also, if you steal anything from Gemstone, ala Androidpk, and don't return it in the same year.. you are liable for the taxes on that "income"...
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  5. #35

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    I'm still hoping that someone will decide that all my old Gemstone shit is an "NFT" and they'll pay me a bunch for it because Snoop Dog bought something in Gemstone once.

    Hell, if an old calculator from the 80's is an antique, I've got a locker full of antiques!

    PS: I don't believe this changes anyone's actual tax liability, but it does change a perceived push by the government to net income that they were letting slide because they hadn't quite figured out how they wanted to pursue it yet. And therefore, as Whirlin says, it promotes compliance. It might stiffle some cash sales of Gemstone stuff in the process. If you think using "friends and family" gets you out of tax liability I've got a broadsword to sell you.
    I don't use Lich. If you want to do business with me, contact me via PM, IG, or on AIM. Or maybe use smoke signals. Don't like it, get off of my lawn.

  6. #36

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    Quote Originally Posted by Archigeek View Post
    If you think using "friends and family" gets you out of tax liability I've got a broadsword to sell you.
    Problem is I don't think Congress/IRS has quite tackled virtual goods yet. They have gotten around to things like Bitcoin and other virtual currency because those currencies typically have a real world value that you can easily trade it in for, but how do they tax things like selling bloodscrip for real dollars?

    Someone spends 1000 real dollars to buy SimuCoins to run arenas and they end up selling all of their earned bloodscrip for 1200 dollars. Can the person deduct the initial 1000 dollars or do they have to pay taxes on the whole 1200? Can they deduct their monthly GS account fee? What about what they pay for internet? And how is it supposed to be reported? As regular income or is the person supposed to be considered a business?

    I think this is the problem with the IRS just being given all of this information without any details, are they going to look at it and be like "Holy shit! This guy received 25k via PayPal and didn't report any of it! They owe us thousands of dollars!" without even realizing the possibility that this person genuinely received 2k in gifts and spent 20k to earn the other 3k they received? This just seems like a way for the IRS to put the onus on citizens to prove they don't owe taxes rather than the IRS proving the person does owe taxes.
    Last edited by Tgo01; 01-07-2022 at 01:32 AM.

  7. #37

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    Quote Originally Posted by Tgo01 View Post
    Problem is I don't think Congress/IRS has quite tackled virtual goods yet. They have gotten around to things like Bitcoin and other virtual currency because those currencies typically have a real world value that you can easily trade it in for, but how do they tax things like selling bloodscrip for real dollars?

    Someone spends 1000 real dollars to buy SimuCoins to run arenas and they end up selling all of their earned bloodscrip for 1200 dollars. Can the person deduct the initial 1000 dollars or do they have to pay taxes on the whole 1200? Can they deduct their monthly GS account fee? What about what they pay for internet? And how is it supposed to be reported? As regular income or is the person supposed to be considered a business?

    I think this is the problem with the IRS just being given all of this information without any details, are they going to look at it and be like "Holy shit! This guy received 25k via PayPal and didn't report any of it! They owe us thousands of dollars!" without even realizing the possibility that this person genuinely received 2k in gifts and spent 20k to earn the other 3k they received? This just seems like a way for the IRS to put the onus on citizens to prove they don't owe taxes rather than the IRS proving the person does owe taxes.
    If you buy something, and sell it for a profit, it doesn't matter what it is or whether or not the IRS has figured out how to prove it yet, you owe taxes. This is true for illegal drugs, NFTs, and Gemstone silvers. Not getting found out is not the same as not owing the tax on the income, and if you deliberately try to hide it, well that's probably a whole different set of penalties. It's one thing to deceive PayPal, and another to hide income from the IRS.

    I totally agree that they haven't got it all figured out, but that doesn't change what you're technically liable for. I'll probably talk to my tax accountant about it, and I honestly have no idea what he'll say. "Wait, you sold a text axe for $12,000? Explain this to me one more time."
    Last edited by Archigeek; 01-07-2022 at 03:41 AM.
    I don't use Lich. If you want to do business with me, contact me via PM, IG, or on AIM. Or maybe use smoke signals. Don't like it, get off of my lawn.

  8. #38

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    Quote Originally Posted by Archigeek View Post
    If you buy something, and sell it for a profit, it doesn't matter what it is or whether or not the IRS has figured out how to prove it yet, you owe taxes.
    Yeah but how is it classified and how does it work? If I spent 5k buying an item and I sell it for 6k do I pay taxes on the 1k profit or the whole 6k? Is it income similar to working income or is it considered business income? Do I have to pay social security taxes on this?

    If the IRS hasn't spelled any of this out yet then it's kind of absurd for them to expect people to comply with this.

  9. #39

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    Really liking the conversations so far in this thread... learning some stuff myself.

    I think people haven't thought about some other random stuff... ie...

    Parents with kids at college... a lot of parents send money throughout the year to their kid... their kid is now going to need to file taxes on that money they are receiving from their parents...

    Sons/Daughters that send money to their parents/siblings... same thing...

    Family loans that go out to help... etc...

    $ is already taxed like 4-5 times by time we get to spend it.... now it's just getting taxed again and again each time people transfer money they've earned already to friends/family/whatever potentially.

  10. #40

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    Quote Originally Posted by Shaps View Post
    Parents with kids at college... a lot of parents send money throughout the year to their kid... their kid is now going to need to file taxes on that money they are receiving from their parents...

    Sons/Daughters that send money to their parents/siblings... same thing...
    To be fair gifts have always been taxable, but the person giving the gift is the one responsible for paying the taxes and you can give something like 15k dollars per person per year that is 100% non-taxable, anything over that amount and the giver has to pay taxes.

    But like I said before if this is all happening on PayPal it's going to send up red flags to the IRS. Like, just for shits and giggles, let's say 4 people send the same person 15k via PayPal in a single year, that's 60k that the IRS is looking at and thinking "That sure looks like a large amount of unreported income to us." What are they going to do with this information? Set up an audit? Harass this person into proving it was all a gift?

    Just handing over this information to the IRS with absolutely no information behind the payments is dumb.

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