IRS Seeks Public Opinion for NFTs’ Treatment as Collectibles

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The US IRS proposed to collect tax from NFTs considering them as collectibles.
The department has asked for public opinion on the matter.
The agency would oversee the treatment of NFTs as collectibles by a look-through analysis.

The US Internal Revenue Service, the statutory body responsible for collecting the US federal tax has proposed to impose a tax on non-fungible tokens (NFTs), considering them as collectibles. The IRS along with the Treasury Department released a document on 21 March 2023, seeking public opinion on the proposal.

Notably, in the proposal, the IRS announced that the department is “soliciting feedback” for the tax treatment of NFTs, adding:

Today’s guidance also requests comments on the treatment of NFTs as collectibles and describes how the IRS intends to determine whether an NFT is a collectible until further guidance is issued.

In addition, the agency assured that IRS would utilize a “look-through analysis” for determining an NFT as a collectible until further guidance on the proposal is issued. In detail, an NFT would be treated as a collectible “if the NFT’s associated right or asset falls under the definition of …

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