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2021 was a big year for NFTs, with Merriam Webster auctioning off its acronym “NFT” in an NFT form for a whopping 15 ETH (nearly $60,000 then.) With all the hype going around NFTs, there is one aspect that was left almost untouched, the federal tax implications of minting or even buying and selling NFTs. Since the IRS hasn’t yet issued any specific guidance when it comes to NFT, how does one report NFT activity on tax returns?
Some NFT-specific activities are not taxable. If you have bought an NFT with cash, minted an NFT, or held a piece of art you created, you do not have to worry about taxes. These are the events that are not taxable, you do not have to report them to the IRS on your tax return.
Buying an NFT with crypto makes you eligible for taxes. Here, you have sold your crypto and bought an NFT, making it taxable. In this case, you have to report capital gains or losses from your sale of crypto.
Money earned from selling NFTs is often categorized as capital gains and taxed like earnings from the sale of more typical capital assets such as property or stocks. How much taxes you need to pay depends on: the amount of time you have held the NFT, the type of NFT, your total annual income, if it was a gain or a loss, etc.
This website www.blockchaintradein.com is operated by Blockchain Investment Group Ltd, a UK investment Firm, Authorized and Regulated by the International Financial Services Commission & FCA UK with (licence no. 11266571). Blockchain Trade In LLC is Registered in USA , New York with Company DOS ID : 6337643.
In the EU, it is regulated as a Category 3 Investment Services provider by the Malta Financial Services Authority . (licence no. IS/57331).
Regulated by the Vanuatu Financial Services Commission (view licence); Regulated by the British Virgin Islands Financial Services Commission (licence no. SIBA/L/21/3337); and Regulated by the Labuan Financial Services Authority to carry on a money-broking business (licence no. MB/21/0033).
Blockchain Investment Group Ltd is located at 55 Loudoun Road St. John's Wood, London, United Kingdom, NW8 0DL. Postal Address: 71-75 Shelton Street, London, Greater London, United Kingdom, WC2H 9JQ
The products offered via this website include Cryptocurrency Trading, contracts for difference ("CFDs") and other complex derivatives. Trading Cryptocurrency may not be suitable for everyone. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, the products offered on this website may not be suitable for all investors because of the risk of losing all of your invested capital. You should never invest money that you cannot afford to lose, and never trade with borrowed money. Before trading in the complex products offered, please be sure to understand the risks involved and learn about Responsible Trading.
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