NFT Tax Consequences

Whenever you make a trade you as the trader take all the risk. If your trade is a bad one and you lose money it is you as the trader who takes the entire loss. Yet if you make a good trade and make a profit you have to share that profit with the government. When you lose you only lose, but when you win, so does the government. The tax burden for NFTs will “likely [be] considered collectibles, which carry a 28% top federal tax rate on long-term capital gains, according to tax experts.” reports CNBC. This is notably higher than the top rate of investments which stands around 20%. The IRS has yet to clarify how NFTs will be treated, but if you have made a profit it is better to assume the higher rate and be pleasantly surprised than to be shocked when you get hit with the hefty tax.

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