Neither of those things are at all obvious. They are very much a "representation of value", and for all I know Epic might record them in a cryptographically secured distributed ledger (indeed that seems like a pretty good idea for resilience).
No one is saying that loot boxes and what-have-you aren't problematic. But it is only mildly relevant.
> Virtual currency is a digital representation of value, other than a representation of the U.S. dollar or a foreign currency (“real currency”), that functions as a unit of account, a store of value, and a medium of exchange. Some virtual currencies are convertible, which means that they have an equivalent value in real currency or act as a substitute for real currency. The IRS uses the term “virtual currency” in these FAQs to describe the various types of convertible virtual currency that are used as a medium of exchange, such as digital currency and cryptocurrency.
Video game currencies are (generally, if your game lets you convert the in-game currency to USD you might actually want to report it) NOT:
1. A store/representation of value
2. Convertible to a real currency
3. A medium of exchange
This implies that things that aren't virtual currencies can still be a "representation of value".
> Video game currencies are (generally, if your game lets you convert the in-game currency to USD you might actually want to report it) NOT:
> 1. A store/representation of value
How are they not? Certainly under the plain face meanings of those words they are. There's a reason we call them "currencies".
Of course, for example: stocks/bonds.
> How are they not? Certainly under the plain face meanings of those words they are. There's a reason we call them "currencies".
They only have value in the video game world of Fortnite, not the real world. Nobody accepts V-Bucks for payment of goods/services.
On that note, where does it say it needs to be convertible back into USD? It's only "unconvertable" once its redeemed. Plus, you can always sell your account, despite it being against TOS.
Obviously the IRS doesnt care one way or another if the value of the vbucks is pegged or inflates, as there would be no capital gains.
That can be pretty shakey though.