IRS is seeking comments on “Tax Treatment of NFTs as Collectibles” / Insights on NFT virtual asset directions

The U.S. Treasury Department and the Internal Revenue Service (IRS) are soliciting feedback on upcoming guidance on the tax treatment of non-fungible tokens (NFTs) as collectibles under tax law. The guidance also asks for comment on the handling of NFTs as collectibles and describes, how the IRS intends to determine whether an NFT is a collectible until further guidance is issued. This means that the tax treatment of NFTs under the capital gains tax rules is not favorable, a move that could have an impact on those who include digital assets in their retirement plans. (PANews report)

As mentioned above, the reason why this situation occurs is because NFT is used as a collectible or virtual asset, which has actual value and is recognized by the public, so regulators will begin to pay attention to supervision in this field to prevent tax evasion. And when the metaverse world slowly matures and popularizes in the future, all the items in it may be NFTs, and the value will be greater, and it will definitely become a part of everyone’s attention, and units such as the IRS will also formulate regulations to facilitate a smoother and softer landing when the real economy transitions to the virtual economy. (SDChain report)

SixDomainChain (SDChain) is the world’s first decentralized public blockchain ecosystem that integrates international standards of IoT Six-Domain Model and reference architecture standards for distributed blockchain.