December 4, 2022

Taylor Daily Press

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US May Want to Tax NFTs - BLOX

US May Want to Tax NFTs – BLOX

There are signs that the US may start taxing Non-Fungible Tokens (NFTs). The US Internal Revenue Service (IRS) has announced that it will classify these virtual tokens as crypto along with digital currencies. This is evident from the (example) instructions for tax year 2022.

Could this example be real?

These mechanisms are not yet finalized – to the delight of NFT owners – but they are special to have NFTs. Virtual currencies are not considered a value or medium of exchange by the IRS until 2021, so the inclusion of NFTs is significant. The IRS hasn’t been quiet about coming up with rules for the Web3 space, and with so much money involved, it’s no wonder they want to tax that too.

“[Digitale bezittingen] Digital representations of value recorded in 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. instructions.

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

First and not a bit late

It would allow the US to join countries like Singapore, Israel and India in taxing NFTs as well. The latter country taxes NFTs at 30%, one of the highest percentages in the world. Additionally, India charges 1% TDS (tax deducted at source) on every transaction. It is even more than 30%.

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The IRS may be a little late since two weeks in advance Pale Sales of NFTs are falling sharply. Also, there is low interest. Perhaps NFT programs in major events like Ballon d’Or Bring some life to the NFT brewery.