IRS Turns Its Attention to Nonfungible Tokens

April 4, 2023

On March 21, 2023, Department of the Treasury and the Internal Revenue Service released Notice 2023-27 (the Notice), which discussed their intent to issue detailed guidance characterizing certain nonfungible tokens (NFTs) as collectibles for U.S. federal income tax purposes under Internal Revenue Code Section 408(m).

The Notice took the unusual step of requesting comments prior to the issuance of formal guidance, strongly suggesting that the Treasury and the IRS were struggling to correctly define and characterize the ever-expanding variations and flavors of NFTs.

While the Notice could be a harbinger of the Treasury and IRS’ long-awaited guidance that’s been long sought by tax professionals and enthusiasts of the Web3 ecosystem, it poses significant questions that will hopefully be reconciled and discussed in further guidance.

Learn more about this topic by Matthew E. Foreman, as seen in Wealth Management.

Read the complete article here.

Disclaimer: The views, opinions or examples included in linked article are those of the author and do not necessarily reflect an official policy or position of ASA or its members.