I am a Tax Consultant with the Tax & Accounting Professional Services team at Thomson Reuters. I love what I do. I develop and deliver web-based and live training sessions to tax professionals, primarily as an instructor for TaxWatch University.
NFTs are kind of a goldmine for the IRS because it really produces multiple taxable events for the parties involved. First of all, you have to look at it from the perspective of the creator of the NFT, or the artist. Usually it’s an artist, but it can also be a writer. NFTs can include a tweet, for example, It’s wild that people would buy a tweet. I think that’s why NFTs have gotten a lot of attention because a lot of us think it’s kind of absurd. They’re paying all this money for an additional copy of something. It could be a tweet or artwork, but you need to look at it first from the perspective of the artist. When the artist sells the NFT, it’s usually through an auction.1 October 2021