Submitted By: someone
Answered: March 2, 2020 9:01 pm

If I buy virtual currency in a game that I play online, do I have to disclose this on Schedule 1 of Form 1040 or 1040-SR?

No. There’s a new question on the 2019 Schedule 1 asking: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” (Instructions to Schedule 1 of the tax return clarify the meaning of these activities.) The IRS has made it clear that virtual currency essentially refers to Bitcoin and similar digital currency, which can be converted into U.S. dollars, Euros, or other real currencies. It does not apply to virtual currencies, such as Ether, Roblox, or V-Bucks, used in online gaming (a “closed ecosystem”).


Tax Glossary

Section 179 deduction (or First-year expensing)

A deduction allowed for investments in depreciable business equipment in the year the property is placed in service.

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