US Treasury to Release Recommendations on NFT Taxation
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March 23, 2023

The Internal Revenue Service (IRS) and the US Department of the Treasury plan to release a series of amendments to how NFTs are taxed.

The rules will reportedly prohibit the addition of non-fungible tokens to an Individual Retirement Account (IRA).

In addition, classifying NFTs as collectibles may affect how they are taxed when traded or sold in the secondary market.

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Depending on a US resident's income, the capital gains tax ranges from 10% to 37%, but for works of art this figure is capped at 28%.

Timothy Cradle, director of regulatory affairs at Blockchain Intelligence Group, has said:

"That means in a scenario where one has an NFT JPEG, then the JPEG is the collectible for the purpose of taxation and not the NFT itself."

The departments have requested comments on the proposed changes by June 19.

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