Do You Owe Taxes on Your NFT?

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Have you been gifted an NFT? If you’ve made a profit from the sale or traded your NFT, it could trigger a taxable event in the eyes of the IRS. This flowchart can help get you ready for crypto tax season, as part of TaxWeek, sponsored by koinly:

, the sector’s total market cap amounts to over $13 billion. And yet, despite the industry’s astronomical size and continued growth, there remains a lack of clarity around NFT taxation for both creators and collectors alike.and replaced the term “virtual currency” with “digital assets,” a broader label to encompass both NFTs and cryptocurrencies.

The IRS treats digital assets as property, meaning they are subject to capital gains tax rates.While the guidance remains somewhat murky, below are the general NFT-related rules of thumb to consider when filing your 2022 taxes in the U.S. Note that there is not yet any official guidance from the IRS on commissions orDisclaimer: This is not tax advice, and we strongly recommend engaging with a tax professional before filing your 2022 tax return.

 

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koinly Whats the difference between an airdrop and a gift?

koinly It all depends how you define “you”

koinly So just airdrop everyone into debt nioce

koinly So its some kind of VAT you need to pay?

koinly C'mon whales stop dragging it out and hurry up and crash it!! Dying of boredom watching this shizzle day in day out. 💤

koinly Is there anything like it!!!

koinly F taxes!

koinly im curious how an airdropped nft will be taxed. at what value is the tax based off? if there is arbitration, does the holder have the option to select the lowest price? man, this is gonna be interesting and a rich (as in how laws will be interpreted) couple of years of tax season

koinly Doesn’t matter if you sold matters if you received , you still pay taxes

KeithGrossman koinly I’ll be getting a tax refund this year 😂😂😂

koinly Thought we're in crypto to get rid of taxes, wtf

koinly Can we even buy NFT through fiat money? CoinDesk NFTCommunity

koinly bright future is here NFTs Crypto tokenization

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koinly try new way of trading rather than traditional one DigitalAsset HODArmy YellowArmy

koinly That's really nice Cryptos NFT digitalassets

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koinly This is more informative NFTs trading CryptoCommunity

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koinly Get the benefit of this article Cryptos CryptoCommunity

koinly Well, it's good if it provides us security and authenticity of the transaction. NFTCommunity AnnexFinance

koinly The IRS treats DigitalAssets as property, meaning they are subject to capital gains tax rates. AnnexFinance NFTMarketplace

koinly NFTs despite the industry’s astronomical size and continued growth, there remains a lack of clarity around NFT taxation for both creators and collectors alike HOD HoDooi

koinly This got me clear Yellow DeFi YellowArmy

koinly To date in 2022, the NFT market has seen more than 8.61 ETH in trading volume across 2.7 million wallets Yellow DeFi YellowNetwork

koinly So if we're buying NFT either with crypto or fiat currency it'll be a taxable event CRO $ANN Annex

koinly NFTCommunity If you’ve made a profit from the sale or traded your NFT, it could trigger a taxable event in the eyes of the IRS. CRO $ANN AnnexFinance

koinly That's very thoughtful of you CoinDesk. AnnexFiance NFTs

koinly I am liking this TaxWeek segment CoinDesk. HODArmy

koinly This got me clear Yellow DeFi YellowNetwork

koinly Receiving a NFT as a gift won't be a taxable event AnnexFinance Annex Cro

koinly The IRS treats digital assets as property, meaning they are subject to capital gains tax rates. Annex AnnexFinance Cronos

koinly tax A must read article for everyone $HOD HoDooi HODArmy

koinly NFT Have you bought or sold a NFT? Here's how the taxes apply $HOD HoDooi CryptoCommunity

koinly This pictorial representation says it all HODArmy HoDooi Crypto

koinly Great work Coindesk. CryptoUpdate

koinly This helped me understand the taxes more $HOD HOD HoDooi

koinly This helped me understand the taxes more $HOD HOD HoDooi

koinly I am going to save this chart pic. YellowArmy cryptocurrencies

koinly If you create a NFT and sell it or trade your NFT for another NFT it is yet a taxable event YellowNetwork Yellow YellowCommunity

koinly So if we're buying NFT either with crypto or fiat currency it'll be a taxable event Cro $ANN Annex

koinly there is not yet any official guidance from the IRS on commissions or royalties received from downstream NFT resales, but they would most likely be considered income. Cronos CronosChain Annex

koinly Quite informative HOD $HOD HoDooi

koinly Soon the government gonna issue tax for Earning apps as well. CoinDesk CryptoChat

koinly YellowArmy DeFi

koinly Self employment income. NFTTax HoDooi

koinly Okay. All are good. But where is the Law to protect Cryptos. CryptoRegulation

koinly In India it is taxed 30%. I hope it should not be true. CryptoRegulation CryptoTax

koinly Unless Until i Sell my NFTCreation. NFTArtists

koinly NFT new the world of Invetsment. HODArmy

koinly Yes! I have from HoDooi for halloween party, NFTArtists NFTs

koinly 'Yellow makes it easier Blockchain '

koinly How do we know how much the airdrop is worth when it's airdropped?

koinly Nah

koinly What is the difference between gift and airdrop?

koinly gifted an nft? that would require.. friends.. right?

koinly Makes sense. You get taxed whenever you realize value through selling crypto. Fiat is what is measured against to determine that.

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