IRS Considers Taxing NFTs
With today’s news from the Federal Revenue Agency (IRS) that it may bar NFTs from IRAs, Those who had intended to boost their retirement funds with JPEGs may want to think twice.
NFTs could be classified similarly to tangible items like art, coins, antiques, and wine, which retirement savings cannot add to their accounts, according to IRS and U.S. Treasury Department recommendations that will be released.
NFTs’ status as collectibles may also have an effect on how they are taxed when traded or sold on secondary markets. Short-term capital gains tax, which NFTs are liable to, can range from 10% to 37% depending on an individual’s income. Nonetheless, the maximum capital gain rate on collectibles is 28%.
(With inputs from Shikha Singh)
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