Music NFTs and Taxes: A Web3 Taxation Guide

Okay, first things first. The basics. Creating (a.k.a. minting) an NFT is not a taxable event. If you create an NFT (a 1:1 or a 10K-strong collection) and no one buys it or trades it, you will not be taxed. So you can rest assured that your decision to tokenize your college diploma will not affect your finances any more than your college education did. Phew! According to Uncle Sam, in the United States, any crypto-to-crypto transaction is a taxable event, including buying an NFT, trading an NFT, or selling an NFT. A handy blog from TokenTax breaks down how any gains you make on NFT trades or sales will be taxed just like any gains on your bitcoin or ether, for example. Pretty straightforward, right? Well, not necessarily. This is crypto we’re talking about, people!