Investors in NFT owe billions of dollars in taxes
As Bloomberg notes, the IRS has not provided clear rules on the taxation of collectible tokens. However, this does not exempt NFT investors and creators from paying taxes, and the IRS may well investigate their activities and impose penalties.
There really is no clarity in the tax calculations. For example, tax experts agree that when a token is issued and initially sold, the owner must file a single income tax return and pay a 37% tax. Investors in tokens must pay income tax.
But there's controversy here - whether NFTs should be characterized as collectibles, since the tax on long-term income from such items is 28%. But for investments in cryptocurrencies and stocks, the tax is 20%.
"We are likely to see an increase in tax evasion cases for investments in NFTs, as well as tax evasion cases for crypto-assets," the IRS believes.
