A thread on how taxes work for NFTs https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">

At a high level, NFT taxes depend on how you interact with them.

There are two ways you can interact with NFTs:

1) You can create and sell NFTs in a marketplace (Creator)

2) You can buy and sell NFTs (Investor)

1/ Creator taxes

Creators get taxed at the time they sell NFTs.

Ex: today, @beeple sold an NFT worth $69M. This will be ordinary income to him and taxed based on his tax bracket.

2/ Investor taxes

Investors pay taxes when they buy NFTs using crypto. This is because they are disposing of a coin to buy the NFT.

Say you had 1 ETH purchased at $100. It& #39;s worth $1,000 at the time of spending for an NFT. Capital gain = $900

3/ Investors also pay taxes when they later sell the NFT into cash or another cryptocurrency.

Say you later sell the above NFT for $3,000. Now, you have a capital gain of $2,000 ($3,000 - $1,000).

4/ Lastly, if you are a high-income earner, NFT gains may be subject to a 28% long-term tax rate vs. the maximum 20% tax rate on regular crypto coins.

More infohttps://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> https://www.cointracker.io/blog/how-non-fungible-tokens-nfts-are-taxed">https://www.cointracker.io/blog/how-...