How the U.S. Taxes Cryptocurrency and NFTs
Tax attorneys Alan Granwell and Joshua Odintz co-authored an article for Simmons & Simmons explaining how cryptocurrencies and non-fungible tokens (NFTs) are taxed in the United States. They begin by definiting a cryptocurrency as far as the IRS is concerned, then explain how individuals and businesses are taxed on the sales of cryptocurrencies. They also answer a variety of questions, such as what the tax reporting obligations are for cryptocurrency transactions and initial coin offerings (ICOs) and whether the payment for goods or services in cryptocurrencies is a taxable event. The article concludes with analysis of the tax treatment of NFTs, both their creation and sale.