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U.S. Internal Revenue Service will audit NFT investors

U.S. Internal Revenue Service will audit NFT investors

The Internal Revenue Service (IRS) officials will audit NFT investors to identify those evading government fees. Government officials' attention was triggered by a report of a $44 billion increase in the NFT market's capitalization.

Why is it so important?  

  • Audits could make the crypto market (NFT in particular) less attractive to investors

According to Bloomberg, the main sticking point is the tax rate uncertainty regarding profits derived from trading with NFTs. Some interviewed consultants believe that income should be subject to the usual 37% income tax. Others point out that non-fungible tokens can be equated to collection pieces, meaning the tax is reduced to 28% if a person undertakes to keep them for a long time. At the same time, income from operations with stocks and cryptocurrencies is taxed at 20%.  

The financial magazine believes that the number of IRS cases against the crypto market will increase in 2022. While some of these cases will be related to investors forgetting to timely notify the tax authorities of profits, which leads to penalties.

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