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In the crypto space, Non-Fungible Tokens(NFTs) have been the talk of the town in 2021. While many individuals, including traders, artists, and collectors, are profiting greatly from their NFT investments, they often overlook the potential tax consequences. The taxation of NFTs can vary, ranging from regular income to capital gains to tax exemption, depending on the specifics of the NFT and the nature of its usage, considering the NFT's multifaceted applications.
But, you don't have to worry, because:
ZenLedger Is Now Offering Native ERC-721 NFT Tax Support!
Simply enter a public receiving address and we will pull in your NFT activity from Mints, ETH-NFT trades, and any income from NFTs.
Here’s how it works:
First, you can easily see your transactions by importing your wallet through our native integrations.
Capital gains taxes are typically levied on profits from cryptocurrency trades, however, NFT transactions defy this norm. As NFTs can sometimes be considered collectibles, they can attract a higher capital gains tax rate. In exceptional cases, NFTs may be considered as inventories and thus be taxed at income tax rates. ZenLedger accurately determines the transaction type and calculates the corresponding tax liability.
Trading ETH for a Bored Ape from the Bored Ape Yacht Club?
We got you covered on your origin cost basis and any proceeds from resales! Your origin cost basis is crucial in determining the tax obligation.
What About Mints?
ZenLedger can also identify the minting of new NFTs and any profits generated from selling this mint.
If your NFTs are on a not yet supported blockchain, or you prefer to enter your transactions manually, there is an option to do so! With manual entry, you can control all of the transaction parameters, including choosing between an incoming NFT and a minted NFT.
Currently, we offer full support for ERC721 standard NFTs, with support for ERC1155 and NFTs on other blockchains coming soon! We strive to make ZenLedger the #1 resource for crypto taxes, and our NFT support is a big part of this!
Concluding Thoughts
NFT transactions in the crypto world have been gaining immense popularity in recent years. However, these trades come with tax implications that are often overlooked. With ZenLedger's native ERC-721 NFT tax support, individuals no longer have to worry about the tax consequences of their NFT trades. Whether trading ETH for a Bored Ape NFT or minting new NFTs, ZenLedger has got you covered.
