Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
RS3
Level 2

Tax-loss harvesting on NFT investment?

Non-fungible tokens (NFT) are being treated as collectible for tax purposes. I wonder if tax-loss harvesting applies to them?

3 Replies
martinmarks1919
Level 9

Tax-loss harvesting on NFT investment?

It doesn't matter whether NFTs are classified as collectibles......if you hold them for investment purposes rather than for personal use then you can deduct the loss.....as a capital loss unless they were somehow business property.

RS3
Level 2

Tax-loss harvesting on NFT investment?

I indeed hold them for investment purposes so I understand now I am able to deduct a loss. Now what about trading them: I sometimes like to trade one NFT (A) for two others (B and C) because it provides me with options, even when this means at times that B plus C is worth less than A (meaning a loss for me). This happens for example when I sell one expensive NFT for two cheaper ones for easier re-sale in the future. Question: how do I value this trade for tax purposes? Do I for example take the last known sale price of B and C and add those up to determine the sale price of A?

martinmarks1919
Level 9

Tax-loss harvesting on NFT investment?

Yes I would think it would be FMV.....market value.....which would be both your sale price for A and basis for B and C.

Dynamic AdsDynamic Ads
Privacy Settings
v