The IRS plans to tax some NFTs as collectibles — and the rich would pay up to 28% on profits

CNBC ^ | March 22, 2023 | Greg Iacurci

[Twotone]

The IRS said it plans to tax some non-fungible tokens, or NFTs, as collectibles akin to art or gems — an approach that would tax profits for wealthy owners at a higher rate relative to assets such as stocks, real estate and cryptocurrency.

The federal government levies taxes on collectibles held for more than a year at a top rate of 28%. It generally levies a top 20% rate on other investments.

In a notice on Monday, the IRS said it intends to issue guidance regarding the treatment of certain NFTs as collectibles.

NFTs are essentially one-of-a-kind digital assets, which can extend beyond digital art to include things such as such as tweets and GIFs. They sometimes also give owners a right with respect to a non-digital asset, like a right to attend a ticketed event or certify ownership of a physical item.

The IRS requested comments from the public, which are due by June 19.

“The IRS hasn’t said anything about NFTs until now,” said Shehan Chandrasekera, an accountant and head of tax strategy at CoinTracker. “This is kind of like half guidance because it’s not finalized yet.”

[nonliberal]

I’m in favor of this.

[zeugma]

NFTs are one of the dumbest things to come about the last few years. Sadly I’m not surprised the government has decided it has the right to steal those or any profit derived from them as well. The US government is as rapacious and violent as any government in history. No surprised when they decide to confiscate yet another thing, no matter how silly.

[zeugma]

The tax code is apparently not yet complicated nor sadistic enough for our masters in Washington.

Indeed. evil never sleeps.