US Might Want to Tax NFTs – BLOX

There are some signs that the US might start taxing non-fungible tokens (NFTs). The United States Internal Revenue Service (IRS) has announced that it classifies these virtual tokens alongside digital currencies as crypto. This is apparent from the (example) instructions for the tax year 2022.

Will this example become reality?

These instructions are not yet finalized – to the delight of NFT owners – but it is of course special that they contain NFTs. Virtual currencies were not considered a store of value or medium of exchange by the IRS until 2021, so the addition of NFTs is striking. The IRS isn’t standing still to come up with rules for the Web3 space, and since there’s a lot of money involved, it’s no surprise that they want to tax it as well.

“[Digitale bezittingen] are digital representations of value recorded on a cryptographically secure distributed ledger or similar technology. Digital assets include, for example, non-fungible tokens (NFTs) and virtual currencies, such as cryptocurrencies and stablecoins. the instructions.

The IRS has said that anything that appears to be a form of digital asset is not immune from US tax authorities. The organization claims that this branch is also used for tax purposes. It also means that NFT owners are not safe, especially if it is such an expensive monkey. This taxable NFT income must – if the instructions become final – be declared for the 2022 tax year.

Not the first and a bit late

This would allow the United States to join countries like Singapore, Israel and India, which also tax NFTs. The latter country even taxes NFTs at 30%, one of the highest percentages in the world. In addition, India also charges 1% TDS (withholding tax) for each transaction. It is even above 30%.

The IRS may be a little late with this, since two weeks ago pale that the sale of NFT is down sharply. Moreover, there is also less and less interest. Maybe NFT projects during major events such as golden ball bring the NFT brewery back to life.