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