How are NFTs taxed in the US?

NFTs are taxed as property in the United States. The IRS lists non-fungible tokens as digital assets, and digital assets are treated as property rather than currency. That means selling, swapping or spending an NFT can create a taxable gain or loss, and creating and selling NFTs can produce ordinary income.

How are NFT taxes calculated in the USA?

When you dispose of an NFT, the gain or loss is the difference between what you received and your basis, which is generally what you paid including fees. Swapping an NFT for crypto, or buying an NFT with crypto, counts as a disposal of the asset you gave up. Holding an asset one year or less makes the result short-term, taxed at ordinary income rates. Holding it more than one year makes it long-term. For how NFTs work technically, see what is an NFT.

Creators are in a different position. The Form 1040 instructions say digital assets received for services or held for sale to customers in a business are reported like other income of that type, such as on Schedule C.

What is the NFT collectibles tax rate?

US law taxes long-term gains on collectibles, such as art, gems and coins, at a maximum rate of 28%, higher than the usual long-term maximum of 20%. In Notice 2023-27, released March 21, 2023, the IRS said it would use a look-through analysis until it issues further guidance. An NFT is treated as a collectible if the right or asset it is tied to is a collectible.

The notice gives examples. An NFT that certifies ownership of a gemstone is a collectible, because gems are collectibles. A right to use a virtual plot of land generally is not. Whether purely digital art counts as a work of art was left open, and the IRS asked for public comments. As of October 2026, the look-through approach in the notice remains the stated interim position.

Can NFTs be held in an IRA?

The notice also matters for retirement accounts. If an IRA acquires a collectible, the purchase is treated as a distribution equal to its cost. So an NFT that counts as a collectible under the look-through test raises that issue. More detail is in can you hold crypto in an IRA or 401(k).

How do NFT losses work for taxes?

If you sell an NFT for less than your basis, you have a capital loss. Capital losses first offset capital gains. If losses exceed gains, up to $3,000 a year ($1,500 if married filing separately) can be deducted against other income, with the rest carried forward. Losses on personal-use property are not deductible. Sales are reported on Form 8949 and Schedule D, as covered in crypto losses and taxes.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.