IRS removes ether and two popular gaming tokens as examples of convertible virtual currencies
February 13, 2020, 6:21AM EST
1 min read
The Internal Revenue Service (IRS), the tax collection agency of the U.S. government, has removed ether (ETH) and two popular gaming tokens - Fortnite’s V-bucks and Roblox’s Robux - as examples of convertible virtual currencies.
The change took place on Wednesday, according to a report from Bloomberg Tax. The IRS’ section on virtual currencies now only mentions bitcoin (BTC) as an example.
If V-bucks and Robux stayed on, it would have required millions of users to a new disclosure requirement - Fortnite and Roblox reportedly have a combined user base of over 300 million.
The IRS’ new disclosure requirement, in revised tax-filing Form 1040, asks people to answer yes or no for a question on whether or not they received, sold, exchanged, or otherwise acquired a financial interest in virtual currency during 2019.
On its website, the IRS defines virtual currency as a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. While convertible virtual currency is defined as one that has an equivalent value in real currency, or that acts as a substitute for real currency.
Bitcoin is one example of a convertible virtual currency, per the IRS. “Bitcoin can be digitally traded between users and can be purchased for, or exchanged into, U.S. dollars, Euros, and other real or virtual currencies."
It is worth noting that ether will still likely be treated as convertible virtual currency, just like bitcoin.