Apparently, V-Bucks and other video game currencies may be subject to federal taxes.
The IRS added a short, yet troubling line to their tax code when defining ‘virtual currencies’ this past October. They specifically cited V-Bucks among the virtual currencies that could be taxed.
The definition read, “Bitcoin, Ether, Roblox [sic], and V-Bucks are a few examples of convertible virtual currency.” So, are we going to have to pay the IRS for stockpiling our V-Bucks and buying too many Fortnite skins?
Experts still don’t seem to be sure. Wednesday, February 12, the IRS scrubbed this line from their definition. Many surrounding the topic, including Brian Fung of CNN, stated that gamers should still treat V-Bucks as if the line had never been removed.
According to the CCN report, anyone who bought V-Bucks, Apex Coins, money in GTA Online, or anything in between will have to fill out a Form 1040, which asks, “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
Those of us who have been buying all the skins we can afford, subscribing to the Battle Pass, and otherwise shelling out money to Epic Games might owe the federal government as well.
As it turns out, you don’t have to pay taxes on your V-Bucks or any other in-game currency that is non-convertible. The IRS later clarified in a statement, shared by Brian Fung on Twitter.
“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,” the statement reads.
“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.”
Of course, you wouldn’t have to pay taxes on V-Bucks. This situation just goes to show you how out of touch some people are. The term ‘virtual currency’ has a massive reach, which means the applications of these currencies can be very different.
The IRS and reporters around the issue were treating V-Bucks like Bitcoin and Ether – actual, real-life money. If you buy Bitcoin and the price goes up, you need to report that on your earnings. Similarly, if the price goes down, you can count that as a yearly loss on your taxes.
V-Bucks are static. You can only use them for in-game purchases. Sure, if you sold V-Bucks to someone then you’d theoretically have to pay taxes, but we’re the consumer. We’ve already paid.
- Read More: What gaming gear do Fortnite pros use?
So, no, you don’t have to pay taxes on your V-Bucks. That would have been something, though, wouldn’t it?