Breaking: US IRS to Tax NFTs as Collectibles

Breaking: US IRS to Tax NFTs as Collectibles

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If you’re holding NFTs, the IRS is close to taxing you, just like it taxes gems, alcoholic beverages, art, and stamps.

According to a Tuesday release, the US Internal Revenue and Treasury Department are looking to tax NFTs as collectibles like other art.

Sequel to the above, both agencies are requesting feedback on any aspect of NFTs that may render their move regarding NFTs tax treatment unjustified.

The release furthered that section 408(m)(2) of the tax code provides for a specific list of items constituting collectibles for tax purpose.

Therefore, until further guidance will be issued, the IRS aims at determining when an NFT is treated as a collectible by using a “look-through analysis.”

“Under the look-through analysis, an NFT is treated as a collectible if the NFT’s associated right or asset falls under the definition of collectible in the tax code,” the release added.

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