Topic: Taxes on NFT holders (Read 276 times)

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.

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

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

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.

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

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.


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.

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

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.

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

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 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.

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.

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

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

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.

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

Tax the poor. Print for the rich. What a perfectly sound way of running a country! I suppose that they are going broke after all, so one should expect some ridiculous moves in an attempt to keep the machine running...they are only making themselves more prone to uproar and rebellious minds who will create technology and solutions to defy these moves. Let regulators and politicians shoot themselves in the foot, Bitcoin and everyone who believes in it will only be better off for it.

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

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

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.

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.

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

The U.S. Internal Revenue Service has taken its first formal steps in laying out rules for the taxation of non-fungible tokens (NFTs), potentially exposing them to a maximum long-term capital gains tax rate of 28% if they are considered collectibles rather than the 20% that applies to other digital assets and to securities. The March 21 Notice 2023-27 says that the agency is intending to issue specific rules for NFTs, which can represent collectible assets (Artwork like the BoredApe Yacht club or Crypto Punks series) and non-collectibles (event tickets) and sometimes both.

This notice marks the first formal attempt by the IRS on laying out guidelines for NFT taxation. Previously taxpayers have been applying general rules applicable to property for NFT transactions, relying on IRS Notice 2014-21 issued in 2014. This notice also comes as part of a visible if undeclared campaign by the executive branch, federal agencies, and some members of Congress against the digital-assets industry.

NFT Tax Treatment
Section §408(m)(2) of the U.S. Tax Code defines a collectible as:

any work of art
any rug or antique
any metal or gem
any stamp or coin
any alcoholic beverage
any other tangible personal property specified by the secretary of the Treasury
Taxation of an NFT under current IRS practice depends on the asset it represents. The agency calls this “look-through analysis” and encourages filers to use it when determining tax consequences until the new guidance is issued. For example, a gemstone represented by an NFT would be a collectible, but the right to develop a plot of land in the metaverse would not.

Collectible Vs. Non-Collectible
The status matters for tax rates and reporting requirements. Long-term capital gains generated from NFTs classified as collectibles could be subject to a 28% tax rate, above the 20% of other capital assets. Moreover, collectible-NFT sales should be reported on Form 8949, Column (f) with code “C” to indicate to the IRS that it’s a collectible as opposed to a regular capital asset.