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The IRS plans to tax some NFTs as collectibles — and the rich would pay up to 28% on profits
CNBC ^ | March 22, 2023 | Greg Iacurci

Posted on 03/26/2023 6:15:20 AM PDT by Twotone

The IRS said it plans to tax some non-fungible tokens, or NFTs, as collectibles akin to art or gems — an approach that would tax profits for wealthy owners at a higher rate relative to assets such as stocks, real estate and cryptocurrency.

The federal government levies taxes on collectibles held for more than a year at a top rate of 28%. It generally levies a top 20% rate on other investments.

In a notice on Monday, the IRS said it intends to issue guidance regarding the treatment of certain NFTs as collectibles.

NFTs are essentially one-of-a-kind digital assets, which can extend beyond digital art to include things such as such as tweets and GIFs. They sometimes also give owners a right with respect to a non-digital asset, like a right to attend a ticketed event or certify ownership of a physical item.

The IRS requested comments from the public, which are due by June 19.

“The IRS hasn’t said anything about NFTs until now,” said Shehan Chandrasekera, an accountant and head of tax strategy at CoinTracker. “This is kind of like half guidance because it’s not finalized yet.”

(Excerpt) Read more at cnbc.com ...


TOPICS: Culture/Society; Government; News/Current Events
KEYWORDS: collectibles; irs; nft; taxes
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1 posted on 03/26/2023 6:15:20 AM PDT by Twotone
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To: Twotone

The newest irs mantra...”it’s Not your money and you Can’t use it when you want to”. Theft is only legal when government does it.


2 posted on 03/26/2023 6:19:52 AM PDT by Qwapisking ("IF the Second goes first the First goes second" L.Star )
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To: Twotone

Well, if we are going to tax people, which we are, then it is only fair to tax everyone equally. Just because someone is profiting in NFT doesn’t exempt them. Now, are these the right rules to apply, when is the profit realized? That I guess is the real question.


3 posted on 03/26/2023 6:20:24 AM PDT by Reno89519 (DeSantis or Sanders, Anyone But Trump in 2024. Time for Trump to Stand Aside and Retire.)
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To: Twotone

Since NFTs have likely dropped in value in the wake of the crypto assets, this means their owners can sell them, realize the loss, and get a tax benefit.


4 posted on 03/26/2023 6:20:34 AM PDT by Pearls Before Swine
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To: Pearls Before Swine

The IRS has a brutal deal going on how they treat gains vs losses.

Gains are taxed immediately, large losses (for tax purposes) are spread out over many years.

It is classic heads we win tails you lose government.


5 posted on 03/26/2023 6:25:00 AM PDT by cgbg (Claiming that laws and regs that limit “hate speech” stop freedom of speech is “hate speech”.)
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To: Reno89519

I think the issue is that NFTs will be taxed at the higher 28% maximum capital gains rate rather than 20% like most investments. If you buy stock or land you get the lower rate. If you buy gold, art or NFTs you get the higher collectible rate.


6 posted on 03/26/2023 6:26:31 AM PDT by KarlInOhio (Gain of Pfunction. Gain of Pfunding. Gain of Pfizer. Now in control of Project Pferitas.)
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To: Pearls Before Swine
Well, yeah. And this might be the thing that inspires them to back off, at least until such time that they become profitable again.

Or it might be sort of a rule like owning your own business. They will allow you to take a loss in two out of five years so long as you report a profit in the other three years.

7 posted on 03/26/2023 6:27:30 AM PDT by Vigilanteman (The politicized state destroys aspects of civil society, human kindness and private charity.)
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To: Twotone

Will this help to greatly eliminate our national debt?

Did the rich create our national debt?


8 posted on 03/26/2023 6:29:53 AM PDT by Leep (Hillary will NEVER be president! 😁)
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To: Twotone

The tax code is apparently not yet complicated nor sadistic enough for our masters in Washington.


9 posted on 03/26/2023 6:44:29 AM PDT by coloradan (They're not the mainstream media, they're the gaslight media. It's what they do. )
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To: Twotone

Are there many NFTs that are profitable?


10 posted on 03/26/2023 6:45:06 AM PDT by Vermont Lt
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To: KarlInOhio

“..NFTs will be taxed at the higher 28% maximum capital gains rate rather than 20% like most investments.”

For us mortals with yearly taxable income less than $550K, the long term capital gains rate is still 15%.


11 posted on 03/26/2023 6:51:14 AM PDT by Roadrunner383
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To: Vermont Lt

I personally think a lot of the NFT stuff is money washing. But, yah, during the last crypto climb some were trading in the the many millions. One sold for over 90 million.


12 posted on 03/26/2023 6:54:11 AM PDT by riri (What’re y’all talking bout? I just got a new set of Michelins for the house!)
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To: riri

$90 million? You ain’t getting THAT today. LOL.


13 posted on 03/26/2023 7:03:35 AM PDT by Vermont Lt
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To: Twotone
and the rich would pay

For some reason, rich is NEVER defined.
???

14 posted on 03/26/2023 7:48:34 AM PDT by DUMBGRUNT ( "The enemy has overrun us. We are blowing up everything. Vive la France!"Dien Bien Phu last messa)
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To: Twotone

A non-digital asset

Just one part of Obama’s digital currency plan.

aka If they can’t remove it from you via computer it’s not yours.

Hitler loved art too to bad Obama doesn’t understands it only knows it’s worth money.


15 posted on 03/26/2023 8:21:15 AM PDT by Vaduz (....)
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To: Twotone

Oh ooos. Guess I should’ve told em I had collectibles


16 posted on 03/26/2023 9:15:24 AM PDT by Nifster ( I see puppy dogs in the clouds )
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To: Leep

Reduce the national debt?

Congress always insists on spending more than the treasury receives in taxes. ALWAYS.


17 posted on 03/26/2023 9:18:52 AM PDT by NorthMountain (... the right of the peopIe to keep and bear arms shall not be infringed)
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To: Twotone

Those of us with functional brain cells will recall Donald Trump’s “big announcement” a couple months ago ...

Remember? NFT “baseball cards” showing his majesty in various ridiculous costumes. His enthusiasts bought them, and some apparently sold very quickly for huge (YUGE?) profits.

More power to ‘em.

But the ‘Rat controlled IRS cannot have failed to notice.

I don’t believe in coincidences ...


18 posted on 03/26/2023 9:22:30 AM PDT by NorthMountain (... the right of the peopIe to keep and bear arms shall not be infringed)
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To: Twotone; All
Thank you for referencing that article Twotone.

"The [constitutionally undefined] IRS plans to tax some NFTs as collectibles — and the rich would pay up to 28% on profits"


FR: Never Accept the Premise of Your Opponent’s Argument

Under the Constitution, its never been the job of non-popularly-elected government bureaucrats to make rules that citizens must comply with. The drafters of the Constitution expected popularly elected lawmakers to accept the risk of being booted out of office by voters for supporting unpopular legislation.

In other words, government bureaucrats not only wrongly weaken the constitutionally enumerated voting power of ordinary qualified citizen voters, but have probably helped to foster the emergence of career lawmakers who let bureaucrats get away with stealing state powers to their dirty work for them.

Patriots, the bottom line is this imo. What is your threshold of “pain” for peacefully stopping unconstitutionally big state and federal governments controlled by bully, constitutionally undefined political parties, from oppressing the people under their boots?

The inevitable remedy for ongoing, post-17A ratification, corrupt political party treason (imo)...

All MAGA patriots need to wake up their RINO federal and state lawmakers by making the following clear to them.

If they don’t publicly support either a resolution, or a Constitutional Convention, to effectively "secede" ALL the states from the unconstitutionally big federal government by amending the Constitution to repeal the 16th (direct taxes) and 17th (popular voting for federal senators) Amendments (16&17A), doing so before the primary elections in 2024, that YOU will primary them.

If the proposed amendment was limited strictly to repealing 16&17A, relatively little or ideally no discussion would be needed before ratification of the amendment imo.

With 16&17A out of the way, my hope is that Trump 47 becomes the FIRST president of a truly constitutionally limited power federal government.

In the meanwhile, I'm not holding my breath for significant MAGA legislation to appear in the first 100 days of new term for what may still prove to be another RINO-controlled House.

In other words, primarying RINOs in 2022 was just for practice. Trump will hopefully do another round of primarying for 2024 elections.

19 posted on 03/26/2023 9:40:07 AM PDT by Amendment10
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To: Twotone

Don’t ask don’t tell.


20 posted on 03/26/2023 9:41:03 AM PDT by Organic Panic (Democrats. Memories as short as Joe Biden's eyes)
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