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Tax consequences of WIN95 team members keeping a piece of software for testing
- Thorrez 3y agoRelated: >I got a 1099-MISC for my hobby of reviewing products on Amazon. Do I have to put it in small business or can I put this in "uncommon income" as the hobby it is? https://ttlc.intuit.com/community/taxes/discussion/i-got-a-1099-misc-for-my-hobby-of-reviewing-products-on-amazon-do-i-have-to-put-it-in-small-business/00/101626 https://ttlc.intuit.com/community/taxes/discussion/i-got-a-1...
- jbm 3y agoWait, 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 activate it. I never managed (not that it mattered, it took 10-15 minutes to load each mission even on DOS; I imagine it would have been worse under Windows 95).
- ido 3y agoWould it have been worse? I don’t recall dos games running any slower under windows 95 than under dos.
- toyg 3y agoI 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.
- rickdeckard 3y agoOn the Hardware I had it was definitely worse to run a game from within Win95. Oh, the flashbacks of tweaking config.sys and autoexec.bat to cram as close to 640KB RAM as possible just to execute a game... The "and here comes the HIMEM.SYS, here EMM386.EXE, then I need MSCDEX to get my CD-ROM...damn...okay, I don't really need the keyboard driver for this..."
- Propelloni 3y agoThank the gods for 4DOS https://wiki.preterhuman.net/4DOS_Introduction_and_Installation_Guide https://wiki.preterhuman.net/4DOS_Introduction_and_Installat...
- chungy 3y agoWindows 95's DOS virtual machines provided pretty close to a full 640KB of free conventional memory to each VM launched. You could even control how much they get through PIF settings (right click the shortcut, go to Properties). There was also no need to fiddle with, eg, mouse and CD-ROM drivers; the DOS VM outsourced the support of those devices to Windows, and did not occupy conventional memory in the way it would under MS-DOS itself. Unless you're booting into MS-DOS Mode, in which case, you're back to all the old awfulness.
- sumtechguy 3y agoWith that particular game it was a matter of memory. If you had 8MB or less free you were in for a BAD time. Ideally the thing really wants 16. So loading it inside of windows would be an interesting time as it uses its own chunk of memory off the top. Learned that years after I had finished the game. I had an 8MB machine and updated it to 16. Wing Commander 3 went from taking minutes to load each level to doing it in seconds.
- balls187 3y agoPC specs?
- rrr_oh_man 3y agoI remember playing (and finishing) it on a 166 MHz Win 95 machine.
- lb1lf 3y agoAs do I, on a 166MHz MMX with a whopping 64MB of RAM. First computer I bought with my own money, pored over computer magazines for weeks to figure out how to get the best bang for my buck. Ended up with a Matrox Millenium 4MB graphics card with a 3dfx Voodoo on top, if memory serves. The budget was maxed out to the extent that the owner of the shop I purchased all the parts at agreed to drive me the two miles back to the ferry home as I had no money for a taxi. Good times.
- mrguyorama 3y agoWhy so much RAM? My Windows 95 computer had 32mb of RAM and even that was overkill.
- lb1lf 3y agoIt dual-booted into W95 or NT4 when I tried to do serious work. MatLab could suck up memory like you wouldn't believe. Also, I think what made me pull the trigger was that RAM prices unexpectedly dropped by quite a lot just as I was about to buy, so I probably figured I might as well do a little future proofing.
- jbm 3y agoI was playing it on a 486 DX-2 66 Mhz, which probably is why I am having such a hard time believing it.
- wpietri 3y agoHuh. I would argue that the software remained the property of Microsoft, and so there were no tax consequences. Presumably if the Windows 95 development manager said, a year later, "Hey guys, time to give all that stuff back," they would. It's just that nobody asked for it.
- kazinator 3y agoPermanent loan, type of thing. Also, they would likely give the stuff back, stuff being the installation discs. Not actually remove it from their PCs.
- bennyhill 3y agoEmployees leave and they presumably didn't ask for anything not in inventory and couldn't ask afterwards with any consequences.. I would view it similar to letting people pick through your ewaste trash. It might have value but the company has written it off.
- paxys 3y agoThe linked post has more details. It was an explicit "you test the software and get to keep it for yourself after that".
- wpietri 3y agoAh, I missed that part. Thanks!
- x-egghead 3y agoInteresting. 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 having a shrink wrap machine in the store to fix damaged or packages missing sealing altogether, it was essentially impossible to tell, as an end purchaser, if a particular item had been used and resealed. This was by design to avoid throwing away returned product or sending it back to the manufacturer as a loss. An unofficial benefit was created to deter shrinkage (employee theft) at this store in particular, had an unwritten policy established by the manager that permitted employees to temporarily "borrow" software that wasn't sealed or was already unsealed such as being returned. I helped closed the store in 1997 after the CompUSA tech hypermart format ate tiny stores like ES that would eventually also meet its own demise.
- flomo 3y agoFor 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.
- dezgeg 3y agoIt sounded to me that he's just responding to a frequently asked readers question. And I'd guess it's more likely for people to ask such question if they're not familiar with US taxation.
- galeos 3y agoWe were also allowed to borrow and re-shrinkwrap games at the Game store I worked in, in the UK, in 2000. Seemed like official company policy to give us better product knowledge!
- kazinator 3y agoWhat 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 terms which do not involve exchange of money. This interpretation could be strengthened if the medium were marked as not for sale or resale. Something given to you cannot count as income if you cannot resell it, or not legally. The interpretation could be further strengthened if the gifted software is not entitled to any support. Now let's think about dual licensing. Suppose you can obtain a proprietary version of a program for $100, or you can get it free under a copyleft license. It's exactly the same program, just packaged with different licenses. Have you received $100 worth of income? Or is it nothing, because the free one comes with no support?
- tedunangst 3y agoEh, well, in this scenario they did keep the installation media, and Microsoft isn't in a position to add resale terms to other parties software, etc., etc. They are not the copyright holder.
- wodenokoto 3y ago> Something given to you cannot count as income if you cannot resell it, or not legally. That definition definitely doesn’t pass muster. You can gift employees Spotify accounts, in their name. Not resellable, definitely a gift.
- Kwpolska 3y ago> Microsoft, the copyright holder Nope. The entire point of this was testing third-party off-the-shelf software.
- bjornsing 3y agoThis 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.
- kazinator 3y agoWhat 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?
- wodenokoto 3y agoYes. Gifts are taxable when they accumulate to a certain size.
- snotrockets 3y ago(Disclaimer: not tax advice. If you get one from randos on the internet, it’s your own fault). In the US, gifts may be due taxes by the giver, not the recipient. In the above case, the question was if it was a gift (and not needed to be paid taxes for by the recipients), or payment for work (which is taxed)
- snotrockets 3y agoThat 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.
- gamblor956 3y agoThis 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.
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- rswail 3y agoIn 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.
- lazyasciiart 3y agoAmerica never did that because it would disrupt the careful allocation of health insurance to people with good jobs.
- HPsquared 3y agoAnd if there's one thing the tax code can't have, it's exceptions!
- duffmancd 3y agoIf anyone is wondering where 2.08 comes from like me. First we consider the case with no GST, where the gross-up multiplier is x1.8868 ($1887). This is the pre-tax earnings at 47% required to get a post-tax benefit of $1000. i.e. $1887 x (1-47%) = $1000. With some algebra and setting the top marginal tax rate to R, and the Gross-up to G: G=1/(1-R). The idea is the Government gets its cut either way, there is no tax benefit (for employees in the highest bracket, and actually a net loss for employees not in that bracket). If the employer can claim back GST (currently 10%) on the original purchase, the formula for G becomes G=1/(1-R)+(1/11)/R. To account for the extra 10%/110% that the employer can claim back.
- hyperrail 3y agoFringe benefits not specifically excepted are also taxable wage income in the United States, but I don't think employers are forced to gross them up at the highest marginal tax rate or are otherwise discouraged from giving them out in lieu of cash. The USA's income tax agency, the Internal Revenue Service or IRS, has a whole booklet to help employers figure out how to withhold taxes for fringe benefits: https://irs.gov/pub15b https://irs.gov/pub15b - Publication 15-B, Employer's Tax Guide to Fringe Benefits It discusses the de minimis exception mentioned in the originally linked page, as well as exceptions for some meals - important if your employer gives you free or discounted cafeteria lunch or restaurant lunch discount coupons.
- londons_explore 3y ago> 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.
- wmil 3y agoI think there are two Ctrl+C actions. The normal copy, which wouldn't be active for an ms-dos application. However there's a second Ctrl+C to cancel a long paste operation. Pasting in Windows / Mac is more complex than most devs these days realize, you can copy vector graphics between MS Office and Adobe Illustrator and it will work out a transfer format. Being able to cancel a long paste was an important feature.
- michaelt 3y agoIt's a long time since I've pasted something into a Windows 95 DOS terminal, but I don't think it worked the way you're thinking. IIRC by default you couldn't just select text with the mouse - as DOS had never had mouse support, and didn't really have the concept of text being selected. You had to click a particular button to activate text selection before it was possible to copy. The GUI looked like this: https://commons.wikimedia.org/wiki/File:Microsoft_Windows_95_Version_4.00.1111_command.com_MS-DOS_Prompt_492x259.png https://commons.wikimedia.org/wiki/File:Microsoft_Windows_95... you'll note there's a toolbar at the top; the dotted square to the right of the 'Auto' dropdown let you select text, then the copy and paste buttons to the right of that let you copy and paste. You'll note that, with no text selected, the copy button is greyed out. I am confused by the article, though - Ctrl+C is famous as the copy key combination, and yet apparently it's the 'cancel active paste' key combination? - so perhaps someone with an even better memory will correct me :)
- bombcar 3y agoI suspect “paste” was more “simulate keyboard strokes that produce the text” in which case that could take a notable amount of time if you had a paragraph in the clipboard.
- miga 3y agoSharing software to be tested for free seems an unalienable right of the company, and indeed many companies distribute free keys to testers. Here author talks about taxing software that remains with the employee, as if it were "gift" or "taxable benefit" of employment, not an exercise of unalienable right to share software for testing. Sounds more like tax office logic, instead of common sense. Taxable benefit would occur if Microsoft bought software of others and gifted it to employee. Or if Microsoft could not reasonably expect people to actually test the software, or allowed them to resell it. It seems like this article does not distinguish non-monetary "benefit" from employment from necessity that the company gives free license to use its software for testing.
- ambentzen 3y ago> Taxable benefit would occur if Microsoft bought software of others and gifted it to employee. Or if Microsoft could not reasonably expect people to actually test the software, or allowed them to resell it. Isn't that exactly what they did?
- offices 3y agoIn TFA, it's 3rd-party software.
- londons_explore 3y agoTax agencies don't go after air miles and other points schemes clearly designed to waste $$$'s of company money to get $ in their own pocket tax free. Considering that, I don't think they really care too much about a few engineers being allowed to keep loaner copies of software they used for testing.
- rjst01 3y agoThe IRS decided in 2002 that taxing air miles was too difficult: https://www.irs.gov/pub/irs-drop/a-02-18.pdf https://www.irs.gov/pub/irs-drop/a-02-18.pdf , but I wonder if this might change in the future if airlines continue to shift towards programs that reward dollars spent rather than miles flown + ticket class. Some countries have specific legislation to exclude air miles.
- londons_explore 3y agoI'd just make a new law targeting schemes to enable/encourage tax evasion. It would hit airlines who sell $$$$ worth of tickets each year, but then hand out discount vouchers/points/miles to customers (many of whom bought the original tickets on business expenses, but take the vouchers/points/miles personally, thereby evading tax). The tax authority would be able to estimate the 'value' in vouchers handed out (not the book cost or stated face value, but what customers value them at), the percentage of those vouchers that represent tax evasion, and then fine the airline 3x the lost taxes. Same for starbucks loyalty cards etc.
- londons_explore 3y agoThat announcement is really depressing. It isn't saying "airmiles aren't taxable". It says "we promise not to enforce laws about tax on airmiles". As a law abiding citizen, I now have a moral dilemma. Pay tax as the law says, or don't pay tax because the government promised not to punish me? Where will the latter lead? It's fine to do other crimes as long as you know the government usually won't prosecute? It's fine to write overly broad laws because we will only enforce them against the truly bad guys?
- nick__m 3y agoI 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 activate it. Level 58! Wow, that’s a dedicated employee!
- criddell 3y agoThe tax question I've always had is around conferences. If I attend a work-related conference in California, I'm being paid to be there and so that's California sourced income and I have to file taxes, right? During the pandemic when everybody was working from home, I thought about renting some place with more interesting scenery for a few weeks. I mentioned it to my bosses and was given a very short list of places where I could do so without triggering tax issues for myself or the company (later in the pandemic more options opened up). When I looked into it, it seems like lots of states are pretty strict about tax requirements for people working remotely from their state.
- bombcar 3y agoMost of this strictness comes from taxing baseball player’s income for the games they play in state.
- sseagull 3y agoTechnically you might owe taxes, depending on the jurisdiction, but of course most people ignore it. It does hit professional athletes, though: https://en.wikipedia.org/wiki/Jock_tax https://en.wikipedia.org/wiki/Jock_tax
- nickjj 3y ago> If I attend a work-related conference in California, I'm being paid to be there and so that's California sourced income and I have to file taxes, right? I'm not an accountant but I have read that baseball players pay state taxes based on where they play, such as away games in a different state. I'm not sure if it applies to tech in the same way, it sounds like it would be a nightmare to file, especially if your company has trips where most of the company might be operating in a different state for a few days or a week. For example[0]: > Professional athletes' taxes are also much more complicated than the average taxpayer. In the U.S., people must pay taxes based both on where they live and where they work. That means when the New York Mets play the Dodgers in Los Angeles, Mets players can be taxed for the days they played in California. [0]: https://spectrumnews1.com/ca/la-west/sports/2023/12/15/ohtani-contract-dodgers-avoiding-california-taxes https://spectrumnews1.com/ca/la-west/sports/2023/12/15/ohtan...
- trylfthsk 3y agoMy least favorite taxes right now are those that apply based on location. In theory, my tax return requires about 4 extra states and a few cities, and a bunch of state registrations, and my payroll provider doesn't support the operations; so the net result is a Helleresque fever dream. In practice, I never leave home on paper.
- billy99k 3y agoAre air miles taxed in the US? United airlines has a bug bounty program and they send you a 1099 for the miles and they say the points are valued a 2% of point value (you are taxed on this). After calculating the point value and the amount I would pay for flights, I would actually pay more money in taxes than I would if I just paid for the flight myself, making the points mostly worthless.
- BuyMyBitcoins 3y agoCredit card rewards on purchases are not taxable events. They are considered refunds/rebates by the IRS. In this scenario United Airlines is compensating people for a service, so these airline miles are considered income. That is why they need to compute the dollar value of those miles in order to report the tax burden. This happens whenever someone is paid with something other than dollars, and when people barter.
- Rebelgecko 3y agoIIRC it depends on how you get them
- tedunangst 3y ago2 cents per point seems about right for valuation. You're looking at some pretty poor redemption value flights if the tax is more than the ticket price.
- trudycharles 3y ago[dead]
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