Tax Guidelines and Clarification for NFTs

Article source, here.

TL;DR

• As the tax filing deadline for US residents approaches, some much needed clarification on taxes for NFTs has been supplied.

• NFTs are now classified as collectible assets, similar to physical collectibles like art, stamps, and coins.

• The long-term capital gains tax rate applies if the NFT is held for more than 12 months; the short-term capital gains rate applies, if it is flipped in less than 12 months.

Full Story

As the tax filing deadline for US residents approaches, some much needed clarification on taxes for NFTs has been supplied.

(Oooft, the contents of that link are dry!)

Most of our friends who enjoy this stuff look a bit like this guy.

If you look like that guy, more power to you - we see you, we hear you, we appreciate you.

For everyone else, here's what's going on:

• The United States Internal Revenue Service (IRS) recently issued guidelines on how NFTs should be taxed.

• NFTs are now classified as collectible assets, similar to physical collectibles like art, stamps, and coins.

• The long-term capital gains tax rate applies if the NFT is held for more than 12 months; the short-term capital gains rate applies, if it is flipped in less than 12 months.

• If you donate an NFT to a qualified charitable organization, it may be eligible for a tax deduction (but make sure you consult your tax specialist before making the donation).

The IRS is historically slow to move when it comes to new technologies.

But when they do move (i.e. supply tax guidelines related to the technology), it further validates the tech and its place in society.

(In this case, that new technology is NFTs).

It may be a small step, but we'll take it!