The US Internal Revenue Service (IRS) is seeking public feedback on what it thinks about taxing a non-fungible token (NFT) as a collectible under the tax law.
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The IRS said in a press release it's also seeking comments on the treatment of NFTs as collectibles and describes how it intends to determine whether an NFT is a collectible.
The tax authority believes that acquisition of a collectible by an individual retirement account or individually-directed account of a qualified plan is "treated as a distribution from the account equal to the cost to the account of the collectible." The IRS added:
"Generally, collectibles also do not have as advantageous capital-gains tax treatment as other capital assets."
The IRS said it plans to receive comments by June 19. While no final decision has been made on how to tax NFTs, the regulator will still treat NFTs like its underlying asset.
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