Is Video Game Money Subject to Taxation?
Nossaman Partner Doug Schwartz was quoted in the Daily Journal article, "Is video game money subject to taxation?" regarding the IRS' ability to potentially tax virtual money that is made in a video game.
According to the article, the growing public interest of the virtual currency Bitcoin is what sparked attention to this issue and led to the guidance being passed last year. This form of currency is identified as a form of property for tax purposes, however, attorneys are unsure how the IRS would enforce its rules.
"I think there should be taxable income when you convert the virtual gaming currencies into something that can be used outside the video game," Mr. Schwartz stated, "but enforcing that is a different matter."