New Guidelines state NFT Holdings can be taxed the same as cryptocurrencies and stablecoins
If you were in the dark about what your NFTs would cost you come tax season wonder no more, the IRS has made a decision on what to do with the nascent assets.
The 2022 tax year guide is upon us and all “digital assets” including NFTs, stablecoins, and cryptocurrency will be taxed under the same rules. This is clearer than last year’s regulations as the language has changed slightly. Last year there was the use of the more ambiguous “virtual currency” which did not make clear whether NFTs were considered a currency. This year the IRS has made clear its stance on all digital assets.
The language of the guidelines is very clear. If you have “disposed of a digital asset in 2022” be it through a sale, exchange, gift or transfer you will have to pay capital gains tax on the action. Another rule states that if you received NFTs as payment for services or disposed of any digital asset that you held for sale you would have to declare that as income.
The IRS has left no room for misunderstanding as it did not classify NFTs as “collectibles” and stated that “if a particular asset has the characteristics of a digital asset, it will be treated as a digital asset for federal income tax purposes”
Tax for capital gains have reached as high as 28% for some countries, Portugal has released such a tax recently. As all loopholes are closing for crypto investors you can expect to see taxes ranging from 0%-28% on all gains.
