Hey ,
It seems the IRS is not resting until it taxes everything that taxpayers have laid their hands on.
First, it was the cryptocurrency, and now their net is widening toward Nonfungible Tokens (NFTs).
Recently, the IRS issued guidance (IR-2023-50) providing guidance on how it plans to determine whether an NFT is a collectible, which will be subject to
taxes.
Through this guidance, the IRS has also shared Notice 2023-27, asking for
comments on how to treat nonfungible tokens (NFTs) as collectibles for tax purposes.
Here are some points to consider about this subject
- Collectibles are subject to a higher tax rate than other capital gains when sold (28% instead of 15% or 20% for other capital gains).
- The IRS will use a “look-through” analysis to determine if an NFT is a collectible based on its underlying right or asset.
- RS will apply a “look-through” analysis to NFTs based on their associated right or asset.
Therefore, since the IRS is giving you an opportunity to comment on this, it would be great to send your voice because if you own NFTs, you will
be affected.
Need any help with your taxes?
Contact my team at +1 202-618-1297 or click the link below to book a quick tax chat with me.
I would be happy to discuss your options and help you make the best decision for your business.
Thank you for considering me for your tax return filing needs. I look forward to working with you.
