In 2021, NFTs have been a hot topic in the crypto world. Traders, artists, and collectors are making huge gains on their NFTs, but often forget to consider the tax implications of these trades.
The tax on NFTs might be classified as regular income, capital gains, or tax-exempt depending on what the NFT is and what the substance of the activity is with the NFT given its many use cases.
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.
Usually, when profiting from cryptocurrency trades, it is subject to regular capital gains taxes. But in the case of NFT transactions, this doesn’t stand true. This is because NFTs can be considered collectibles and will therefore qualify for higher capital gains tax. However in some rare circumstances, it can be considered as inventories, thus being subject to income tax rates. ZenLedger will identify the type of transaction and calculate the tax liability accordingly.
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 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 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!