Has anyone considered what the tax ramifications are going to be when you buy a non-fungible token (NFT) in the US? For example, you buy a crypto Kitty for ETH. In a program like https://bitcoin.tax/ you can record that transaction in the "spending" section. But you didn't spend the ETH on a goods (like food or drinks), you exchanged it for an asset which may or may not increase in value over time. I don't know if this topic has been considered yet as NFT's have just started taking off this year.
Thank you for your time.
Thank you for your time.
I'm not familiar with the bitcoin.tax software, but a digital collectible should probably be treated the same as cryptocurrency -- as property -- for tax purposes. It's not real property so like-kind exchanges don't apply, and they obviously can't be treated as currencies.
You would treat the sale of ETH for crypto-kitty as selling ETH for USD, then separately buying the crypto-kitty with USD. It's the same tax treatment as bitcoin-altcoin trading.
