NFT taxes: the asset and the transaction both matter

Buying with crypto can also dispose of crypto

An NFT purchase paid with a digital asset can require a calculation for the asset spent. Keep that disposal separate from the acquisition basis of the NFT. Selling the NFT later is another event.

Do not assume every NFT has the same rate

Notice 2023-27 describes a look-through approach to determining whether an NFT is a collectible based on the associated right or asset, pending further guidance. A collectible classification can change tax treatment. Check the applicable guidance and facts for your token.

Creators and collectors keep different records

Business receipts, royalties, minting costs and investment sales can take different reporting routes. Save the contract address, token ID, related rights, transaction date and USD values.

• Keep the original listing and rights attached to the NFT.
• Record marketplace, royalty and network fees separately.
• Preserve acquisition evidence even if the marketplace closes.

Keep exploring