The NFT Investor’s Worst Nightmare: IRS Craves For A Crackdown

Last year, when the NFT Everydays: The First 5,000 Days by Beeple sold at Christie’s for $69.3 million, it catapulted the non-fungible token’s market into the mainstream. A large number of people have invested billions in this industry and the boom is not stopping. Recently, NewsBTC reported an aggressive surge in the NFT trading volume this year despite the falling crypto market. A report by Dappradar showed that in the first ten days of January, NFT trading generated around $11.9 billion. Our previous report quotes Mason Nystrom, a senior research analyst at Messari, who alleged that “The cryptomarkets are fairly correlated – the market tends to rise and fall with Bitcoin. This has made it surprisingly interesting over the recent downturn as the NFT market has continued to increase in volumes.” However, the rapid rise of the NFT space has not moved the officials of the Internal Revenue Service (IRS) to shed some light on the taxation parameters for the assets. Even taxation experts are confused on the matter and can only speculate about the possible outcomes. As a large share of NFT traffic comes from the younger generations, are users prepared for tax filing season? The IRS is gazing at future penalties. Related Reading | January Proves Turbulent For Investors But NFT And GameFi Seems To Be Eating Good The IRS Gears Up In November 2021, the $1.2 trillion infrastructure bill was signed into law by President ...