The hunt for billions of tax dollars owed on NFTs

With all the buzz and discussion around NFTs one area might have been lacking on the conversation side. TAXES.

Protos.com published an article that at least in the U.S. the I.R.S. is gearing up to collect potentially billions.

From the article:

As reported by Bloomberg, tax experts in the US suggest profits from sales on platforms like OpenSea or Rarible are taxed as ordinary income (up to 37%).

They also generally agree that US residents buying NFTs with crypto owe capital-gains taxes on both the purchase and future re-sales.

But direct government guidance around the $44-billion NFT industry has been thin on the ground.

There seems to be a lot of talks about where NFTs fall? Are they a collectible carrying a higher capital gains rate? Will there be some guidance from the I.R.S. before people have to file on April 15?

The article goes on:

It could be that the US government deems NFTs “collectibles,” which reportedly carries a max capital-gains rate of 28% (compared to 20% for stocks and most cryptocurrencies).

But there’s no formal guidance specifically for NFTs, and the US Internal Revenue Service (IRS) doesn’t accept ignorance as an excuse.