← Guides

NFT Tax Guide

Non-fungible tokens (NFTs) are treated as property by the IRS. Buying, selling, minting, and trading NFTs all trigger taxable events, with different treatments for creators, investors, and traders.

The IRS has not issued NFT-specific guidance beyond applying general property tax principles. When you buy an NFT with cryptocurrency, that purchase is a taxable event — you've disposed of crypto (a property) to acquire another asset, realizing a capital gain or loss on the crypto used. When you later sell the NFT for crypto or fiat, you realize a capital gain or loss based on the difference between your cost basis (purchase price plus fees) and the sale proceeds.

For example, you buy a Bored Ape NFT for 100 ETH when ETH is $2,000. Your cost basis is $200,000 (plus fees). Six months later, you sell the NFT for 150 ETH when ETH is $3,000. You realize a sale proceeds of $450,000 and a long-term capital gain of $250,000. At the 20% long-term rate (assuming high income), you'd owe $50,000 in federal tax plus potentially the 3.8% NIIT — an additional $9,500.

NFT creators face different rules. When an artist mints and sells an NFT, the proceeds are ordinary income (self-employment income), subject to both income tax and self-employment tax. If they later buy back their own NFTs, that's a separate taxable event. Royalties received on secondary sales are also ordinary income. Creators should track minting costs (gas fees) as part of their cost basis for the first sale.

Record-Keeping for NFTs

NFT tax reporting requires meticulous records: purchase price in crypto (including the USD value at transaction time), gas fees, sale proceeds, and all wallet addresses involved. NFT-specific tax software (like Koinly or CoinTracker with NFT support) can help. Wallet-to-wallet transfers are not taxable, but any exchange of value (buying, selling, trading) is.

FAQs

Is creating an NFT a taxable event?

Minting an NFT itself is generally not taxable (you're creating an asset, not disposing of one). The taxable event occurs when you sell the minted NFT. At that point, the sale proceeds are treated as ordinary income to the creator. However, gas fees paid in crypto to mint are a disposal of that crypto and may trigger a capital gain or loss.

How are NFT airdrops taxed?

NFT airdrops are taxed as ordinary income at the fair market value when received or when you gain control over the NFT (the IRS is still developing guidance on timing). If an NFT airdropped to your wallet is worth $5,000 at the time you can trade it, you report $5,000 as ordinary income. Subsequent sale is a capital gain or loss.

Does the wash sale rule apply to NFTs?

No, because NFTs are classified as property (collectibles) rather than securities. However, if the IRS or Congress extends wash sale rules to crypto assets, NFTs may eventually be included. For now, you can sell an NFT at a loss and repurchase the same NFT immediately without disallowance.

Related Guides

Tax Refunds & Overpayments — InvestmentKitHow to claim a tax refund from HMRC, processing times, checking your tax account online, common reasons for overpayment, and how to avoid refund scams.Andorra Tax Filing Guide: Departament de Tributs, Deadlines 2026Andorra tax filing — Departament de Tributs i Fronteres online portal, individual filing deadline April 30, corporate filing March 31, IGI monthly/quarterly, penalties, and compliance for 2026.Australia Cross-Border Tax Guide (Foreign Resident Withholding, FIF Rules, Tax Treaties)Australian cross-border and international taxation — the foreign resident withholding tax rates, the Foreign Investment Fund (FIF) rules, the tax treaties, the transferor trust rules, the foreign tax Guyana Corporate Tax Guide: CIT 25%, Small Business 0%/10% 2026Guyana Corporate Income Tax — 25% standard rate, 0% for small businesses (turnover under GYD 15M) for first 3 years then 10%, oil and gas incentives, and compliance for 2026.Armenia Corporate Tax Guide 2026 — CIT 18% Standard, 0% IT Sector, 0% Small BusinessArmenian corporate income tax. Standard CIT 18% for resident companies, 0% for certified IT companies, 0% for small businesses under AMD 24M turnover, branch taxation, capital allowances, and loss carAustralia Crypto Tax Guide (ATO Guidance, CGT on Crypto, Staking, Airdrops, Record Keeping)Australian cryptocurrency taxation — the ATO guidance on the crypto assets, the CGT treatment of the crypto disposals, the taxation of the staking rewards, the airdrops, the DeFi transactions, the cry
Browse all guides →