Things Every Investor Should Know to Avoid and Survive an NFT Tax Nightmare in Crypto World
We all saw the non-fungible tokens (NFTs) reigning over the decentralized world in 2021. From every platform to every well-known celebrity, the
endorsement of NFTs was real and there is no way the trend has settled down. More and more people are entering into NFTs and it is important to know the NFT tax parameters.
Where both Beeple and Bored Ape Yacht Club created an enchanted spell over the masses, the tax dos and don’ts are highly neglected by NFT communities. With a whopping amount of $23 billion in trading volume, NFTs are becoming the second most popular crypto form in the world.
Many traders lack the understanding of tax implications and how they should deal with them if they are into NFTs. Their lack of understanding often drags them to nightmares. In this article, we will be listing some of the basics of these tax implications and what traders should do.
1. Tax Upon Purchasing NFTs
When you cryptocurrencies, there is always a specific amount of tax involved that you have to pay to claim that said cryptocurrency. In the case of NFTs, when you buy an NFT with Ether, you are disposing of your cryptocurrency and buying something else from it.
The process of disposing of crypto in the digital world is considered taxable so does buy a new one. As the price goes, you might face a loss or you can either have a huge profit……