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Can you make a legit business on SL to benefit you IRL?


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This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

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1 minute ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

if you think it is against the ToS then file a Abuse Report

if the response to your Abuse Report from Linden is a resounding zero then best to find something else to wonder about

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No matter how much you're earning on Second Life is not against the ToS unless you break any ToS specific rule while doing so c= the rest is a matter of their country's laws and regulations regarding income tax 

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1 hour ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

Is what against rules or ToS?  What are you asking?  
If you are asking if the virtual sex work is legal- under US law it is- no different than cam girls (or guys) who receive payment for being peeked at.  If you want to point out how unregulated it is in SL in regards to who exactly are you interacting with (& their age) then that’s a whole other can of worms, but it’s not exactly what you asked.  If you are asking if making a real living from SL is legal- of course it is

.…..side note-afterthought:  “hundreds & thousands of USD’.   I really doubt it’s highly profitable because slex is everywhere with loads of it free & while there are certainly likely big spending whales they’re bound to be rare. 

Edited by Pixie Kobichenko
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1 hour ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

It is legal at any rate. It doesn't matter if you cash out $100 or $100.000. Taxes have to be paid of course.

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Can you make a legit business on SL to benefit you IRL

Yes you can. Most merchants and entrepreneurs in SL don't get more than pocket money out of it, or even only roleplay to be successful, but there are several people making serious money out of SL.
And that is totally legal, as long as you comply to the rules that LL has stated in their TOS and the rules (like income tax) of the country that you live in.

Edited by Sid Nagy
I love to edit.
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3 hours ago, Mollymews said:

She is profiting irl from converting Lindens to hundreds and thousands of USD

On an annual basis, which is what LL will report to the IRS in the US, that is nothing.  Nobody said over $100,000 - although many successful businesses in SL make over that.  Sex industry can be profitable - no advanced degrees required, not much risk.

 

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What is many?
Some might make that kind of money, but many... no, nope.
Some land lords, some mesh body and head producers maybe, but for the rest I have my serious doubts.

USD 100,000 is an awful lot of L$ to be made.

Edited by Sid Nagy
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2 hours ago, Lillith Hapmouche said:

Jealous much?

If this is about who I think it's about, I'm jealous.  They seem to be doing well and the YouTube videos I've seen have been very informative for people looking to start an SL business. 

Sadly, RL factors may be playing a role in why this is even coming up for this particular creator.  Sometimes certain people react a certain way when certain people appear to be doing well.

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I mean either way. Her 'business' on discord does involve her staff on SL, who do RL camshows through Discord. And she does collect your real ID to access the NSFW content, but what she does with that information is she stores it to her info files and keeps a hold of the screenshot ID card. 

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5 hours ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

To answer the title of your thread - yes. There are dozens of people in SL running businesses that make them a real-world profit. If anything this business is involved in is illegal then that would be a problem, but converting Lindens to real-world money isn't.

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3 hours ago, CloudRedHeart said:

I mean either way. Her 'business' on discord does involve her staff on SL, who do RL camshows through Discord. And she does collect your real ID to access the NSFW content, but what she does with that information is she stores it to her info files and keeps a hold of the screenshot ID card. 

Anything that she does outside of SL is outside of the TOS authority.   So anything done on Discord or any non-LL website cannot be regulated by LL.

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8 hours ago, CloudRedHeart said:

She is profiting irl from converting Lindens to hundreds and thousands of USD.

BTW - How do you know how much money she is making?  People exaggerate all the time in SL.  I'd recommend that you just not worry about it.

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10 hours ago, bigmoe Whitfield said:

after 20,000 dollars or there about she will be hit with tax forms for the irs,  they are not opt-out unless she lives out side the US I believe,  so some one is aware of her earnings.

No. Once you hit the $600 USD mark, LL files a 1099 MISC with the IRS. 

https://www.irs.gov/forms-pubs/about-form-1099-misc

Quote

File Form 1099-MISC for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Payments to an attorney.
    • Any fishing boat proceeds.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

 

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11 hours ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

Read the TOS and find out. 

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36 minutes ago, Silent Mistwalker said:

Once you hit the $600 USD mark, LL files a 1099 MISC with the IRS. 

Interesting. IIRC once an (American) individual makes upwards of $400 they're supposed to file self-employment tax forms.

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23 minutes ago, Quistess Alpha said:

Interesting. IIRC once an (American) individual makes upwards of $400 they're supposed to file self-employment tax forms.

Still a 1099. The 1099 NEC

https://www.irs.gov/instructions/i1099msc

Quote

Instructions for
Forms 1099-MISC
and 1099-NEC - Main Contents

 

Specific Instructions for Form 1099-MISC

File Form 1099-MISC, Miscellaneous Income, for each person in the course of your business to whom you have paid the following during the year:

  • At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8).

  • At least $600 in:

    1. Rents (box 1);

    2. Prizes and awards (box 3);

    3. Other income payments (box 3);

    4. Generally, the cash paid from a notional principal contract to an individual, partnership, or estate (box 3);

    5. Any fishing boat proceeds (box 5);

    6. Medical and health care payments (box 6);

    7. Crop insurance proceeds (box 9);

    8. Payments to an attorney (box 10) (see Payments to attorneys, later);

    9. Section 409A deferrals (box 12); or

    10. Nonqualified deferred compensation (box 14).

 

You must also file Form 1099-MISC for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment.

More info:

https://www.irs.gov/faqs/interest-dividends-other-types-of-income/1099-misc-independent-contractors-and-self-employed

 

Edit: Sorry forgot to say you are correct. From the link above:

Quote

 

The IRS requires you, the individual, to report anything over $400 per annum on a Schedule SE, whereas Linden Lab is required to file a 1099 on anything over $600 they pay out to the individual because they do not withhold SS etc.

As to why the difference between the $400 and $600, you would need to ask the IRS about why it is that way. I'd probably just confuse you even more. lol

Edited by Silent Mistwalker
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29 minutes ago, Quistess Alpha said:

Interesting. IIRC once an (American) individual makes upwards of $400 they're supposed to file self-employment tax forms.

I think you as an individual are required to report when you've earned anything over that amount but businesses are required to report when they've paid someone 600.

Edited by Finite
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12 hours ago, CloudRedHeart said:

This woman on SL owns a sex-focused club and has made everything incorporating her 'name brand' into a website, twitter, and everything social media. She is profiting irl from converting Lindens to hundreds and thousands of USD. Is this even legal at the rate she is making, or is this against rules and ToS?

As to whether it's legal, that would have to depend, I would think, on the jurisdiction you have in mind.     

However, as to the ToS, let's consider the facts as we know them and then try to apply a bit of common sense.

Whoever it is you're talking about has clearly spent a lot of time and effort on building her brand into the success you say it is.

Her success, to my mind, must depend on her SL "name brand," as you put it, being extremely widely known not only in SL but also online generally,  and it seems to me inconceivable that all this has happened without the Lab noticing at some point.

I mean, would you not agree that it's a bit unlikely she's achieved this degree of fame (notoriety?) without LL having had ample time to consider the matter and, if they have any concerns about it, to take whatever action they think is justified?

Bearing all that in mind, what do you think is the most likely answer to your  question?

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1 hour ago, Innula Zenovka said:

Bearing all that in mind, what do you think is the most likely answer to your  question?

And, I might add, why do you care? Are you planning to open a competing business?

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