Paying Real Taxes for Virtual Items?

All you have to do is visit eBay to see that your virtual acquisitions in Azeroth have real money value.  But if my epic-geared character has a real value (a priest in my guild was recently offered $1000 for his character), does that make it a taxable asset?  The IRS has no definitive answer for this, though as the market for buying and selling virtual goods becomes larger, there's the chance that this could change.  While such real life consequences for a game might seem far-fetched, they're already starting to occur - players in South Korea have been prosecuted for stealing virtual property and Chinese courts have ordered game companies to restore stolen (virtual) goods.  Can the IRS be far behind?

This article was originally published on WoW Insider.