You Might Not Have To Report In-Game Virtual Currencies On Your Tax Form Anymore

Bitcoin is a form of a virtual currency that you can buy using real-life money, and since it can be used to pay for things, the IRS has stated that you will need to report your bitcoin transactions. This was the same logic that was applied to in-game virtual currencies, such as those used by games like Fortnite.

However, according to a recent change on the IRS’ website, it appears that gamers no longer need to declare their in-game virtual currency earnings on their taxes anymore. Answering questions by reporters at a Washington conference, IRS Chief Counsel Michael Desmond confirmed that the inclusion of in-game virtual currencies was a mistake and that the deletion from the website was made to correct it.

There was initially some confusion about it, but a formal statement released by the IRS reads, “The IRS recognizes that the language on our page potentially caused concern for some taxpayers. We have changed the language in order to lessen any confusion. Transacting in virtual currencies as part of a game that do not leave the game environment (virtual currencies that are not convertible) would not require a taxpayer to indicate this on their tax return.”

Basically, it sounds as though if you were to use the virtual currencies within the game’s environment, like to purchase cosmetics, upgrades, and whatnot, you will not need to indicate it on your tax returns, but if you were to resell it for real-life money, then that would be a different story.

That being said, since we’re not accountants, it’s probably best to double check with a professional for your tax filings this year just to be on the safe side.

Tyler Lee
Categories: Gaming, General
Tags: Legal