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Tax consequences of WIN95 team members keeping a piece of software for testing

devblogs.microsoft.com

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Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#21

Post by bjornsing »

kazinator wrote: post #7

What does it mean to "keep" the software? You can return the installation media, and say you erased the program, without having erased it. I would say that if you work for Microsoft and they give you a program free in order to test, then it's not a form of income. The program doesn't represent monetary value in that situation. Microsoft, the copyright holder, is licensing you to have a copy of that program under term…

This sounds surprisingly logical to me as a Swede. Here you can be taxed for income even if you didn’t receive anything at all. Take for instance a company office with a canteen exclusively for employees. Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#22

Post by mdekkers »

bjornsing wrote: post #21
kazinator wrote: post #7

What does it mean to "keep" the software? You can return the installation media, and say you erased the program, without having erased it. I would say that if you work for Microsoft and they give you a program free in order to test, then it's not a form of income. The program doesn't represent monetary value in that situation. Microsoft, the copyright holder, is licensing you to have a copy of that program under term…

This sounds surprisingly logical to me as a Swede. Here you can be taxed for income even if you didn’t receive anything at all. Take for instance a company office with a canteen exclusively for employees. Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income.

> This access is considered a taxable income.

Sounds like this meets the definition of racketeering

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#23

Post by rswail »

In Australia, we have "Fringe Benefits Tax" which applies to that sort of thing.

Basically anything that is considered a non-cash benefit is FBT tax owed by the employer. The tax is at the current maximum marginal income tax rate (47%) on a "grossed up" value of the benefit (currently 2.08).

So $1000 of benefit is grossed up to $2080, then taxed at 47% so FBT of $977.60.

Employer can deduct cost of the benefit ($1000) and the FBT ($977.60) from the company's income as an expense. I've left out the complications of GST (VAT) in the example.

There are a bunch of exemptions and stuff (eg for Xmas/end-of-year parties etc) as well as allowable travel expenditure for work etc.

Basically designed to make the fringe benefit not worth giving to employees by employers so that they pay them the cash instead as income.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#24

Post by gamblor956 »

snotrockets wrote: post #17
kazinator wrote: post #9

What if it's not your employer? If you buy a pizza for $25 and get another one free, is that also $25 income that is only exempt due to de minimis ?

That is considered a sales discount (you wouldn’t get a free pizza without buying another one), and as such not taxable. Just as if you’d buy something on a 50% sale.

This is the correct answer, in the U.S.

A sales discount is not income, nor is it a gift (which are not taxable to the recipient, but are possibly taxable to the giver).

In dsign's example, where the pizza is from your employer: in the U.S., it would generally be de minimis if it's a one-off or infrequent event. If it's a regular thing though, it generally is considered income unless it's very low value. The I.R.S. ruled long ago that any single item over $100 is not de minimis, but as this was a fairly old ruling, with inflation most practitioners think the modern threshold before the I.R.S. cares is somewhere between $250-$600.

Note: I do taxes for a living. While I don't do individual taxes, I deal with gifts to employees, etc., all the time.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#25

Post by kazinator »

dsign wrote: post #20
kazinator wrote: post #9

What if it's not your employer? If you buy a pizza for $25 and get another one free, is that also $25 income that is only exempt due to de minimis ?

It it's not your employer, then for tax purposes it will be considered that you bought your pizzas at $12.5. You always get to pay sales taxes on the $25 amount. If it is your employer giving you the pizza, there is a different story. I can't tell you how it would work in USA, but I'll tell you how it would work in Sweden. In a few cases, which include you being an employee of United Nations, you wouldn't pay taxes o…

> You always get to pay sales taxes on the $25 amount.

But that $12.5 per pizza is below market value, so you got a gift, which is income.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#26

Post by kazinator »

bjornsing wrote: post #21
kazinator wrote: post #7

What does it mean to "keep" the software? You can return the installation media, and say you erased the program, without having erased it. I would say that if you work for Microsoft and they give you a program free in order to test, then it's not a form of income. The program doesn't represent monetary value in that situation. Microsoft, the copyright holder, is licensing you to have a copy of that program under term…

This sounds surprisingly logical to me as a Swede. Here you can be taxed for income even if you didn’t receive anything at all. Take for instance a company office with a canteen exclusively for employees. Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income.

Just because it happens in Sweden and you're a Swede doesn't have to make it logical to you.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#27

Post by flomo »

x-egghead wrote: post #6

Interesting. So the Egghead store in San Jose on Blossom Hill Road had 2 interesting employee perks: 0. Vendor reps, including those from Microsoft, were happy to see you cheap NFR copies ($10-25 USD mostly, with some expensive packages going for $50-150) of almost their entire catalog of retail and semi-retail channel software. 1. Here's the shady one: since 99.9% of software was only "sealed" by shrink wrap and hav…

For that type of employee, it would all fly under the standard deduction anyway, so the IRS would not care. (Unless you had a side-business making $$ on this.) This is the first Raymond Chen post I've read which seems kinda dumb and pointless. Oh yeah I need to deduct my copy of random DOS app DBPieGraphicsPro-VII, which was left on a table at work.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#28

Post by yardstick »

gamblor956 wrote: post #24
snotrockets wrote: post #17

Earlier quoted context omitted.

That is considered a sales discount (you wouldn’t get a free pizza without buying another one), and as such not taxable. Just as if you’d buy something on a 50% sale.

This is the correct answer, in the U.S. A sales discount is not income, nor is it a gift (which are not taxable to the recipient, but are possibly taxable to the giver ). In dsign's example, where the pizza is from your employer: in the U.S., it would generally be de minimis if it's a one-off or infrequent event. If it's a regular thing though, it generally is considered income unless it's very low value. The I.R.S.…

Does the IRS take into account losses by the company?

Eg if A Jewellery shop gave employees a special 2-for-1 / BOGOF gold bars, I expect that’d raise lots of red flags?

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#29

Post by toyg »

ido wrote: post #4
jbm wrote: post #3

Wait, they managed to get Wing Commander 3 working on Windows 95?? > Bonus chatter: During one of the many iterations of this story being retold, someone remarked that they got a copy of the video game Wing Commander III through this exercise. I immediately remembered that they fulfilled their expectation by filing a bug against Windows 95: When you earned the cloaking device on level 58 or something, you couldn’t ac…

Would it have been worse? I don’t recall dos games running any slower under windows 95 than under dos.

I guess it depends on the hardware you had. On lower-spec machines, some games needed pretty much the entirety of one's RAM; Windows 95 obviously took some itself, so launching a game from it rather than booting to raw DOS would result in degraded performance.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#30

Post by londons_explore »

> changing Windows 95 so that it installed the Ctrl+C hotkey handler only when a clipboard paste operation was active,

My understanding of the windows clipboard is that at boot time, the clipboard was empty, but at any other time the clipboard would retain the last thing copied.

That presumably means this game would work after a fresh boot, but any other time the game wouldn't get past level 58. Doesn't sound fixed to me.

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