IRS changes language that includes NFT – NFT Plaza

One of the challenges that comes with novel assets like NFTs is how exactly to tax them. After all, most existing tax codes were created long before NFTs existed. As such, the treatment of NFTs under the tax code is a question that spans all industries.

luckily, US Internal Revenue Service (IRS) has given it more clarity with its updated tax codes.

The new draft that the IRS has released offers some clarifications for those who file with Form 1040. More specifically, the terminology used for one of the asset classes has changed from “virtual currency” to “digital asset”. But only this name has been changed The document clearly mentions NFTs and notes that they include

“A digital asset is any digital representation of value recorded in a cryptographically secured distributed ledger or similar technology. For example, digital assets include non-fungible tokens (NFT) and virtual currencies, such as cryptocurrencies and stablecoins.” says the document.

This move clears up a lot of potential confusion about the place of NFTs within the tax system and means that those who invest in them can stay on the right side of the law.

Discover the world of NFTs >> The Ultimate NFT Guide

Want more? Connect to NFT Plaza

Join the weekly newsletter
Join our Discord
Follow us on Twitter
Like us on Facebook
Follow us on Instagram

*All investment/financial opinions published by NFT Plaza are derived from the personal research and experience of our site moderators and are intended as educational material only. Individuals should do thorough research on any product before making any type of investment.

Tokoni Ooty has written extensively on blockchain and cryptocurrency over the years. His work has appeared on sites such as BTCmanager and Blockchain Reporter. He has a degree in Corporate Communication.

https://ift.tt/2KzvpIs

Baca juga