Are NFTs taxed as collectibles?

In the US, the IRS has indicated that some NFTs may be classified as collectibles, which could subject long-term gains to a higher 28% tax rate. The classification depends on the underlying asset.

Do I pay taxes when I buy an NFT?

If you buy an NFT with cryptocurrency, you realize gains or losses on the crypto spent, which is taxable. Buying with fiat currency is not a taxable event, but you establish a cost basis for future sales.

How are NFT creator royalties taxed?

NFT royalties are taxed as ordinary income when received. If you're a regular creator, this may be considered self-employment income subject to additional taxes.

What if my NFT becomes worthless?

If an NFT becomes worthless, you may be able to claim a capital loss. Document the circumstances and consult a tax professional about abandonment or worthless security rules.

NFT Taxes 2026: Complete Guide

How Are NFTs Taxed?

NFTs are generally treated as property for tax purposes, similar to other cryptocurrencies. However, in some jurisdictions like the US, NFTs may be classified as "collectibles" which can result in higher tax rates.

The tax treatment depends on whether you're a buyer, seller, creator, or receiving NFTs as income. Each scenario has different tax implications.

NFT Tax Scenarios

Buying NFTs

Purchasing an NFT with cryptocurrency is a taxable event for the crypto used. You realize gains or losses on the crypto spent. The NFT's cost basis is the fair market value at purchase.

Crypto used: Capital Gains

Selling NFTs

Selling an NFT triggers capital gains tax on the difference between sale price and your cost basis. In the US, NFTs may be taxed as collectibles at up to 28%.

Taxed as: Capital Gains (potentially collectibles rate)

Creating & Selling NFTs

If you create and sell NFTs, proceeds are typically taxed as ordinary income (self-employment income). You may deduct business expenses like minting fees and platform costs.

Taxed as: Self-Employment Income

Royalties

Creator royalties from secondary NFT sales are taxed as ordinary income when received. Track each royalty payment and its fair market value.

Taxed as: Ordinary Income

Special NFT Tax Considerations

Collectibles Tax Rate (US)

The IRS may classify NFTs as collectibles, subjecting long-term gains to a maximum 28% tax rate instead of the standard 20% for other capital assets.

Gas Fees & Minting Costs

Gas fees for buying NFTs can be added to your cost basis. For creators, minting fees and platform commissions may be deductible business expenses.

NFT Airdrops

NFTs received via airdrop are typically taxable as income at fair market value when received. If the NFT has no established value, tax treatment may be deferred until sale.

NFT Tax Tracking Tips

Document Every Transaction

Record purchase price, sale price, dates, platform fees, and gas costs for every NFT transaction. Screenshots of marketplace listings can serve as proof of fair market value.

Track Royalty Income Separately

If you're a creator earning royalties, track this income separately from capital gains. You may need to report it on different tax forms and pay self-employment taxes.

Consider NFT-Specific Tax Software

Many crypto tax platforms now support NFT tracking. These tools can import transactions from OpenSea, Blur, and other marketplaces automatically.

CryptoTaxList