IRS quietly deletes guideline that Fortnite virtual currency must be reported on tax returns

[erek]

How many of you all owe taxes on your Fortnite currency holdings, huh? Hmm

"Just because you may need to answer "yes" to the question on Schedule 1 does not necessarily mean you need to fill out anything else, Steber said. It depends on your personal situation. But some may need to report capital gains stemming from their virtual currency transactions on other forms.
"This question is an indicator that more is likely coming — more guidance, more rules, more requirements, more oversight and monitoring by the IRS," he said. "It's no longer something that's going to live in the background shadows. There's too much money there."
Although there's much that's still unsettled about how to track virtual currency transactions — and who should be responsible for it — Baker said the onus is still on taxpayers to figure out whether they owe the IRS and to fill out an accurate tax return, at least for now."

https://www.cnn.com/2020/02/13/tech/fortnite-taxes/index.html

 

[Aix.]

Wonder why they would choose Fortnite's V-bucks...you pay real money (which should be taxed) and the product you're purchasing is the V-bucks that you can then use in-game. They should be getting sales tax revenue off the original transaction; you can't "invest" in V-bucks and see capital gains.

 

[ThatITGuy]

Wonder why they would choose Fortnite's V-bucks...you pay real money (which should be taxed) and the product you're purchasing is the V-bucks that you can then use in-game. They should be getting sales tax revenue off the original transaction; you can't "invest" in V-bucks and see capital gains.

You cannot expect logical reasoning for this stuff from people who only know two things 1) People are becoming millionaires from playing Video Games 2) Their grandkids talk about and watch this game called Fortnite, which is apparently really big.

 

[gtrguy]

All I can do is shake my head at these morons. Seriously, what’s next? Telling people to pay taxes on the Monopoly Hotels they own?

 

[AaronGant]

So they argue that if the currency is convertible to USD then it's taxable. I'm thinking World of Warcraft here. Since you can buy and sell gold 3rd party, even if blizzard doesn't like it, then it's a convertible currency. So do you have to file capital gains every time you gain money for looting coin off a corpse in WoW? Is buying healing potions from a vendor in-game considered a virtual currency transaction for online good/services that is taxable? How about the in-game auction house? If I gain a huge amount of money in-game without spending any real money then blizzard shuts down WoW can I write it all off as capital losses and save on my taxes?

 

[Liver]

So they argue that if the currency is convertible to USD then it's taxable. I'm thinking World of Warcraft here. Since you can buy and sell gold 3rd party, even if blizzard doesn't like it, then it's a convertible currency. So do you have to file capital gains every time you gain money for looting coin off a corpse in WoW? Is buying healing potions from a vendor in-game considered a virtual currency transaction for online good/services that is taxable? How about the in-game auction house? If I gain a huge amount of money in-game without spending any real money then blizzard shuts down WoW can I write it all off as capital losses and save on my taxes?

Its a one way street.

Edit. Shouldn't the game subscriptions be tax deducible then? Business expense?

 

[N4CR]

How dare you anti semites not pay the eternal tax man everything three times over every time you do something with money you've already been taxed twice on! The fact that people still fall for the tax scam in 2020 speaks volumes.

 

[Liver]

The enforcement arm of this scam is brutal.

 

[pillagenburn]

All I can do is shake my head at these morons. Seriously, what’s next? Telling people to pay taxes on the Monopoly Hotels they own?

Only if everyone believes that monopoly hotels are worth something and they're willing to exchange goods and services for access to monopoly hotels.

 

[cjcox]

I'm just glad that Leroy Jenkins has been pardoned after all these years.

 

[gtrguy]

Only if everyone believes that monopoly hotels are worth something and they're willing to exchange goods and services for access to monopoly hotels.

But Fortnite items and currency are virtual. You can use actual money to buy in game currency to get items but you can’t do the reverse- there’s no way to sell/trade skins or items that I’m aware of.