If tokens are used instead of money for the exchange for goods/services, is such an exchange regarded as a form of payment? Tokens as in those used in arcades, car wash, laundries, etc.
Yes, it is possible.
The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
1 lawyer agrees
Yes. The value of the exchange would be the fair market value of the services provided. They would disregard the tokens and look at the form of the transaction. The tokens might play into whether income was recognized when received under the accrual method, but either way, it will be recognized when services are performed. Consideration can take all different forms and it is almost impossible to make transactions between unrelated parties non-taxable by changing the "currency."
2 lawyers agree