Nuked On Wednesday, the IRS quietly changed a provision on its website that said transactions of virtual currency like Fortnite’s v-bucks were taxable and may have to be reported on tax returns.
The IRS defines a convertible virtual currency as one that has an equivalent value to or acts as a substitute for real currency. Bitcoin, ether, Roblox, and v-bucks are listed as specific examples.
Irs chief counsel Michael Desmond told reporters today that the issue was’resolved quickly-as soon as it was brought to our attention’. He was apparently emphatic that there is n’t anything else to read into the situation. The author of Bloomberg tax’s story, ally versprille, questioned Desmond today.
Desmond said people should n’t read more into the gaming currency issue than what is now out there.’it was a website. That’s where it is,’ he said.
The IRS has n’t explicitly exempted the comments from needing to be reported. The author of a CNN article on the situation says the IRS should not be required to report them.
Tax experts are telling me that until they’re exempted, you should treat v-bucks like Bitcoin. Until the IRS never deleted the langauge, we should treat the langauge like Bitcoin.
Jerry Brito, executive director of the non-profit cryptocurrency research firm coincenter, shared one interpretation of the current policies yesterday.
Question 1 on the 2019 1040 form asks:’did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?’.
