Taxes on NFT holders | Bitcointalksearch.org

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Quote from: odunybiz on March 30, 2023, 05:25:27 PM

Do you think KYC will be necessary to play online games? I don't see any important in this KYC when it come to online game.

We don't need to talk about necessary or unnecessary, but it's technically possible every games would ask KYC because it's centralized. Most of your friends play that game and you want to play that game too in order to join their circle, will you submit your KYC? obviously yes since you're don't have a choice.

NFT is centralized, so the government can collect the tax from NFT. It's different if we talk about decentralized project where it can't be controlled by anyone including the developer.

Renampun

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Quote from: Bay_Harbour_Butcher on April 06, 2023, 12:09:40 PM

this does not only happen in the US, taxation issues have been problematic for a long time, especially in my country, namely Indonesia, here crypto and NFTs are also taxed, the big problem is that it is not the NFTs that are taxed, but where the proceeds of the taxes go, only a small part is actually managed by the government for the state, some of the tax proceeds go into the wealth of government officials, through corruption and money laundering

I also come from Indonesia and I think this rule is 50:50 beneficial between the government and NFT owners, I'm sure we all know that some NFTs are used by some people to avoid taxes or money laundering even though with rules like this, new people those who want to try their luck at NFT will slowly back off and won't want to linger in NFT for long.

in some countries the discussion about imposing taxes on cryptocurrencies, NFT and WEB3 is still hotly debated, the government is just avoiding them it is obvious that they are too eyeing investors' money in this new technology.

Hispo

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Quote from: ?? on ??

Quote from: Hispo on March 29, 2023, 08:32:29 PM

That was unexpected, quite high considering this is rather a new kind of asset.
On the other hand I find amusing that people at the IRS is willing to tax literally anything that has liquidity. In the early days on Bitcoin, I assume they were laughing at the idea of it becoming an actual currency or being accepted to some extend as a tool to transfer value in a decentralized way.

As soon as liquidity, adoption and volume increased, they had stop the laughter and move onto taxing.

Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

How things are going, it should not be a surprise Steam and Epic Games would ask for full KYC in a decade or earlier.
But it would make more sense it was related to MMORPG's where people can partake in a secondary market of in-game currency, which gains are (of course) taxable.

Yes, that does make sense in this kind of thing. Certainly more than taxing Steam and Epic Games

Well, if somehow Steam or Epic launched a NFT game and players started to profit somehow out the in-game transactions, those who are making profit are the players and neither the distributor or the developers of the game, so the government cannot realistically tax Steam or Epic as distributors, because there is not profit coming from the game for them for declare, besides of course that they get from the royalties and micro-transactions.

Bay_Harbour_Butcher

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this does not only happen in the US, taxation issues have been problematic for a long time, especially in my country, namely Indonesia, here crypto and NFTs are also taxed, the big problem is that it is not the NFTs that are taxed, but where the proceeds of the taxes go, only a small part is actually managed by the government for the state, some of the tax proceeds go into the wealth of government officials, through corruption and money laundering

disconnectme

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The issue with Taxes is that it never stops, they will always find something to tax, so not surprising they are coming for NFTs now, I for one have issues with some of the NFT transactions, it seems like money laundering to me, the irony of the matter is that ones those using NFTs for money laundering start paying their taxes from this, it legitimizes their trade and the money is made clean and whole of all dirt.

rokok lokal

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Yes, the new tax rules for NFT holders are sure to create uncertainty in the market. While selling quickly can provide relief, it is important to consider the potential consequences of such a decision. The value of the NFT may increase in the future, and those who sell now may lose out on potential profits.

Well, what we can conclude is to analyze investment strategies carefully and seek expert advice to make informed decisions and to be aware of the latest developments in the market can help you anticipate any changes that may affect your investment.

Hypnosis00

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Quote from: CarnagexD on April 01, 2023, 02:19:10 AM

This is the first time I heard of this but I am not surprise that NFTs are taxed well because the government will tax anything that earns profit. I think this is a big start for the taxation, once one state start, it'll just be a matter of time before the others do the same.

If they tax NFT, then they also imposed taxes on all crypto traders as it also generates profits. I'm not going to say it was fair but for me, it was not the right time to do it. I know it soon this will happen to crypto but it should be imposed together applying to everyone who has crypto in their wallets.
Anyway, maybe we are going to be prepared for this. Sadly, NFT got the prize first of paying taxes and we never know who's next, meme coins holders or Bitcoin holders.

Well, I'm not against it honestly as long as the tax was fair enough. Besides, we can also benefits the taxes we give to the government unless their is corruption.

CarnagexD

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This is the first time I heard of this but I am not surprise that NFTs are taxed well because the government will tax anything that earns profit. I think this is a big start for the taxation, once one state start, it'll just be a matter of time before the others do the same.

Wexnident

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It is what it is, I don't think it's anything bad, especially if we consider how the nft scene is (where 99% of it is rather questionable even imo). Well I do consider the scene to be rather dead at this point,so I'd say they're kind of late-ish? But regardless nfts ain't really going to disappear so them putting this out isn't really going to negatively affect what the want to happen.

Quote from: Hispo on March 30, 2023, 09:24:26 PM

I don't think it will be a huge impact on the NFT ecosystems, because (if I recall correctly) those players who are interested in Play-2-Earn games are from countries which are not developed, like Latin America and South Asia, for example. Where the minimum wage is low

Wouldn't they just release a separate law when it comes to p2e earnings? Or just apply trading rules to it otherwise, people in mmos who sell in game currency should also technically be affected (or any other similar actions like it)

Hispo

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Quote from: Renampun on March 30, 2023, 12:48:36 AM

Quote from: Hispo on March 29, 2023, 08:32:29 PM

Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

How things are going, it should not be a surprise Steam and Epic Games would ask for full KYC in a decade or earlier.
But it would make more sense it was related to MMORPG's where people can partake in a secondary market of in-game currency, which gains are (of course) taxable.

with the possibility of imposing taxes on NFT games that generate money it will have a big impact on players, the development of NFT games that generate money has not been fully accepted by many people, if news like this already appears then I doubt people will be interested in playing NFT games in the future ahead.

Quote from: Darker45 on March 29, 2023, 08:40:15 PM

Well, in all fairness, this is probably the right thing to do, especially at this point in time when NFTs are apparently used for money laundering. Somebody can make millions of dollars in legitimate transactions selling pixelated images and monkey jpegs. So I guess it's just the IRS doing its job well. This may be perceived as a villain agency but it's just performing its mandate.

But what I'm particularly amazed at is how updated the IRS is on what's happening around. In my country, the Bureau of Internal Revenue is clueless and is still operating on archaic policies.

as a bureau with authority, they are reasonable to make tax regulations on NFTs, especially now that NFTs are already categorized as digital assets, but the rates are quite high, just imagine up to 20% ++ of the value of the NFT assets.

I don't think it will be a huge impact on the NFT ecosystems, because (if I recall correctly) those players who are interested in Play-2-Earn games are from countries which are not developed, like Latin America and South Asia, for example. Where the minimum wage is low.

In the case of those in the United States, they are mostly interested in NFT's as a speculative vehicle, those who buy and hold APE NFT's would be encourage not to sell them, so they would not have to pay the taxes. It may translate in a decrease of the volume, but I am not sure yet if this could be positive in a context of less supply (less people selling) and the same demand.

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Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

And on that case, Steam is much better and not subject to tough ruling than of those who holds NFTs and cryptocurrencies.

Quote from: odunybiz on March 30, 2023, 05:25:27 PM

Quote from: franky1 on March 29, 2023, 06:39:42 PM

so soon you wont be able to play online games without KYC

Do you think KYC will be necessary to play online games? I don't see any important in this KYC when it come to online game.

It's just like a projection that possibly might happen and the comparison is that, playing online games might require some spending as well but the money that's being used there will only be subject to taxation from the game developers and not with the players.

Whilst in NFTs, we've known that there have been P2E games that requires NFTs as game characters in able to start the game. Having that said, it's not only the developers are subject to taxation but also the players.

odunybiz

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Quote from: franky1 on March 29, 2023, 06:39:42 PM

so soon you wont be able to play online games without KYC

Do you think KYC will be necessary to play online games? I don't see any important in this KYC when it come to online game.

lionheart78

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Quote from: Darker45 on March 29, 2023, 08:40:15 PM

But what I'm particularly amazed at is how updated the IRS is on what's happening around. In my country, the Bureau of Internal Revenue is clueless and is still operating on archaic policies.

Isn't that a good news for us? We can still have a tax-free interaction with NFTs. I hope our BIR will stay clueless and stuck operating on archaic policies. Grin

After all, I don't believe that 100% of the tax collected by this bureau goes to the government treasury.

Honestly I do not mind the government taxing NFT holders after all tax is taken on the successful trade that brings profit to the holder. It is that 28% is a bit high IMO.

Quote from: Lorence.xD on March 30, 2023, 03:27:28 AM

As far as I know, it would be impossible for government to put taxes on decentralized market. Here in my country, NFT games were popular especially in the times of pandemic. A lot of investor tried this kind of investment where it reach to the point that it has been acknowledged by the media and news. They interviewed people who profit and asked them questions such as what they did to their money. Some bought houses, motorcycle and build businesses.

Due to its popularity, government take initiative to how people can earn that much without paying taxes. They announced it to the public that taxes will be included when playing NFT games. Of course they can't do that in the end its still decentralized. Maybe in the next decades some games every transactions will include taxes fee. It just need some proper documentation and legalisation.

They are not taxed because there isn't a law yet that is implemented on the subject matter. They had only announced that NFT will be included and yet there is no bill or regulatory implementation made yet. It is different if the law is already made and the announcement is the implementation itself not just an announcement to include.

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Quote from: Yogee on March 30, 2023, 09:05:40 AM

Quote from: Lorence.xD on March 30, 2023, 03:27:28 AM

As far as I know, it would be impossible for government to put taxes on decentralized market.

You really believe NFTs are decentralized? This is like saying Tornado Cash is decentralized until the Government made its move. Keep in mind that anything that generates profit is generally taxable in all places unless there's a specific law that says it's not.

I would guess that you could make it decentralized until figured out. No matter how hard you try, if I open a new metamask today, and put all my NFT in there, nobody in the world would be able to track that down to me, that's impossible, you can use something like The onion router as well to make sure that it can't be tracked back to you and you are done.

Basically it is as decentralized as you want it to be, and then when you want to cash that out, there are mixers if you want to use it, but then you could always just pay the cash if you profited and not really care about the tax in that situation, after all making x100 means you can pay the tax.

woez

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My opinion regarding Tax regulations are often subject to change, and it is possible that proposed tax regulations on NFTs may not come to fruition or may be revised in some way. I think it's also worth considering the potential long-term value of NFTs, as well as the potential gains or losses from holding them beyond the tax implications.

Regarding the decision to sell or retain NFTs is an individual decision which should be based on a thorough understanding of the situation and a careful assessment of individual financial goals and risk tolerance.

Gyfts

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Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

I'd imagine they would want you to pay taxes if you bought an in-game item and then resold it for a profit regardless of any new NFT classifications. Under these guidelines though, the seller would be subject to nearly a 30% tax presumably. Wonder how many people will inadvertently have dodged taxes not realizing their in-game item sale would be subject to the same tax as any other digital asset?

That's assuming they don't make in-game items classified as a collectible. NFT's aren't physical so the Biden administration are just making useless tax provisions because they're desperate for revenue. They need to pay their trillion dollar spending packages somehow.

rossjamie

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In the end tax people will try to find their way to charge you a tax more. It's an open secret though,
if they don't have any resource to charge the tax maybe they will charge you for breathing or walking

Yogee

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This is just a formality. If the IRS have been encouraging taxpayers to file NFT holdings according to its purpose then it's only a matter of time before a specific law is introduced.

Quote from: Lorence.xD on March 30, 2023, 03:27:28 AM

As far as I know, it would be impossible for government to put taxes on decentralized market.

You really believe NFTs are decentralized? This is like saying Tornado Cash is decentralized until the Government made its move. Keep in mind that anything that generates profit is generally taxable in all places unless there's a specific law that says it's not.

karmamiu

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Quote from: S3300 on March 30, 2023, 08:13:13 AM

Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

Only in the US I bet, this is getting out of hands and the current president of the US needs to leave the office for someone better to run, this man is just trying to milk out of every possible thing he can think of, I am hoping that this will only affects all players in the US, I can't do without online gaming, this will suck very bad.

I remembered back then when gamers are very excited about the future of gaming industry as how it was depicted on the anime Sword Art Online (SAO if you know what I mean) yet now it's getting farther and farther from the reality, although we knew that it is close to impossible, doing this act against the gaming community will only leave dreams as dreams. I don't know about other companies but there're few companies who are planning to adopt NFTs such as steam to their gaming experience, and if this new law implemented world wide, how will the players able to afford those taxes? I have been a free to play gamer since the launch of DOTA 2, do we have to go to jail for being unable to pay tax from games? I should've listened to my mom back then and focused on my education. Roll Eyes

S3300

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Quote from: franky1 on March 29, 2023, 06:39:42 PM

imagine it

paying tax on ingame purchases.. turns Steam into tax reporting agents of its customers rather than games retailers

so soon you wont be able to play online games without KYC

Only in the US I bet, this is getting out of hands and the current president of the US needs to leave the office for someone better to run, this man is just trying to milk out of every possible thing he can think of, I am hoping that this will only affects all players in the US, I can't do without online gaming, this will suck very bad.

Topic: Taxes on NFT holders (Read 276 times)