Is the exchange of tokens for goods/services a form of payment?

Asked over 2 years ago - Los Angeles, CA

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.

Attorney answers (3)

  1. Ronald Lee Bell

    Pro

    Contributor Level 14

    3

    Lawyers agree

    Answered . Yes it is consideration

    Contact local consel
  2. Michael Charles Doland

    Contributor Level 20

    1

    Lawyer agrees

    Answered . Yes, it is possible.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may... more
  3. Christopher Michael Larson

    Contributor Level 19

    2

    Lawyers agree

    Answered . 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."

    Christopher Larson
    Insight Law

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