ETH will likely be treated as convertible virtual currency like Bitcoin after IRS removed it from website
The US government’s tax collection agency Internal Revenue Service (IRS) has removed Ethereum (ETH) and two gaming tokens Fortnite’s V-bucks and Roblox’s Robux as examples of convertible virtual currencies. Currently, the IRS only refers to Bitcoin as an example.
IRS removes ETH and two popular gaming tokens
According to the IRS report in revised tax-filing Form 1040, they asked people to answer yes or no to questions about whether they received, sold, exchanged, or obtained financial benefits for cryptocurrencies in 2019 or is not.
The IRS does not call cryptocurrency a cryptocurrency. They call them “virtual currencies” and define cryptocurrencies as a digital representation of value that functions as a means of exchange, an accounting unit, and/or a store of value. Meanwhile, convertible virtual currencies are defined as a currency of equivalent value in real money or acting as an alternative to real money.
The IRS website initially listed Roblox and V-bucks as examples of convertible virtual currencies, in addition to famous cryptocurrencies like Bitcoin and Ether. However, the site modified to contain Bitcoin as the only example. If Roblox and V-bucks stayed on, both would require millions of users to a new disclosure requirement – Fortnite and Roblox intelligently had a combined user base of over 300 million.
Source: IRS website
Roblox is an immersive video game that allows users to design their games. Roblox users can earn or buy Rob Robux immediately to buy avatar upgrades or special abilities. V-bucks are the currency used in the infamous Fortnite fighting game to purchase weapons and costumes.
Here’s a thing that make me go 🤔. Short thread:
Tens of millions of American taxpayers will have to answer Question 1 on the 2019 1040 form: “At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?”
— Jerry Brito (@jerrybrito) February 12, 2020
Bitcoin is an example of a convertible virtual currency. Bitcoin can be digitally traded between users and can be purchased or exchanged for US dollars, Euros, and other real or virtual currencies.
It is worth noting that Ether is still likely to be considered a convertible virtual currency, like Bitcoin.
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