Microsoft recently updated the Xbox Community guidelines, to make the community a safe environment for all. Interestingly enough, the company has also outlined what can be considered as acceptable trash talk.
Obviously, among unaccepted trash talk on Xbox Live is everything that includes profanity, racial slurs, sexual threats and the like.
Acceptable trash talk includes
Get destroyed. Can’t believe you thought you were on my level.
That was some serious potato aim. Get wrecked.
Only reason you went positive was you spent all game camping. Try again, kid.
Cheap win. Come at me when you can actually drive without running cars off the road.
That sucked. Get good and then come back when your k/d’s over 1.
Going too far looks like
Get <sexual threat>. Can't believe you thought you were on my level.
Hey <profanity>, that was some serious potato aim. Get wrecked, trash.
Only reason you went positive was you spent all game camping. KYS, kid.
Cheap win. Totally expected from a <racial slur>.
You suck. Get out of my country--maybe they'll let you back in when your k/d's over 1.
Punishment for offenders has also been outlined. Players may get some features restricted, such as playing games online, sending messages, voice chat and more. Repeated offenders will get their account permanently banned, losing access to licenses and purchased content as well.
The full new Xbox Live Community Guidelines can be found here.