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US Nft Tax

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US federal tax treatment of NFTs (non-fungible tokens) — property classification, collectible look-through 28% rate (PROPOSED, Notice 2023-27), creator (ordinary + SE) vs investor (capital) treatment, royalties, minting/gas basis, and gifting/donation. Broader crypto rules: us-crypto-tax, us-crypto-income-events, us-crypto-reporting.

Applicable period 2025Source-cited draft· Last updated Jun 23, 2026

Source-cited draft.Written from sources but not reviewed by a licensed practitioner, so it may be incomplete or wrong. General reference only; don't file or take a position on it without professional review.

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Key figures — United States, 2025

Every figure is drawn from this Tax Guide and cited to its source.

General classification of NFTs

An NFT is a digital asset and, like other convertible virtual currency / digital assets, is treated as PROPERTY for U.S. federal income tax purposes; general tax principles applicable to property transactions apply. There is no special NFT-specific Code provision — character and timing follow the ordinary property rules.IRS Notice 2014-21 (virtual currency = property); IRS Digital Assets / Virtual Currency FAQs Q2View source ↗

Capital vs ordinary depends on holder

Character of gain or loss depends on whether the NFT is a capital asset in the holder's hands. A taxpayer generally realizes capital gain or loss on the sale or exchange of an NFT held as a capital asset (investor/collector). If the NFT is not a capital asset (e.g., inventory/property held by its creator in a trade or business), gain or loss is ordinary.IRS Virtual Currency FAQs Q4, Q19; IRC §1221 (capital asset); IRC §64/§65 (ordinary income/loss)View source ↗

Look-through analysis for collectible status

Under a 'look-through analysis', an NFT is treated as a collectible if the NFT's associated right or asset is a collectible under IRC §408(m) (e.g., an NFT certifying ownership of a gem or a physical work of art is a collectible). An NFT whose associated asset is not a collectible (e.g., a right to a purely digital file, virtual land, or in-game item) is not a collectible. THIS IS PROPOSED GUIDANCE ONLY — the IRS announced its intent to issue guidance and requested public comments; it is not yet binding regulation. (PROPOSED — Notice 2023-27 states the IRS INTENDS to issue guidance using a look-through analysis and requests comments; until final guidance, NFT collectible status is determined under existing law on the facts.)IRS Notice 2023-27View source ↗

Definition of 'collectible'

'Collectible' is defined in IRC §408(m)(2): (A) any work of art, (B) any rug or antique, (C) any metal or gem, (D) any stamp or coin, (E) any alcoholic beverage, or (F) any other tangible personal property specified by the Secretary. Notice 2023-27's look-through tests the NFT's associated right/asset against this definition (read without regard to §408(m)(3), per §1(h)(5)).IRC §408(m)(2)View source ↗

28% maximum rate on collectible LTCG

28%IRC §1(h)(4); IRC §1(h)(5)View source ↗

Holding period (short vs long-term)

If an NFT held as a capital asset is held for one year or less before sale or exchange, gain or loss is short-term (taxed at ordinary rates). If held for more than one year, gain or loss is long-term (subject to preferential LTCG rates, or the 28% maximum if treated as a collectible).IRS Virtual Currency FAQs Q6; IRC §1222 (holding period); IRC §1223View source ↗

Basis of an NFT received / acquired

Basis in an NFT received as payment, or acquired by exchanging other property/crypto, is its fair market value in U.S. dollars at the time of receipt. Gain is recognized to the extent FMV of property received exceeds the holder's adjusted basis in what was given up; a loss arises if FMV received is less than adjusted basis.IRS Virtual Currency FAQs Q13, Q12; IRC §1011/§1012 (basis); IRC §1001 (gain/loss)View source ↗

Minting costs / gas fees

For an investor/collector who acquires an NFT as a capital asset, acquisition costs (purchase price plus transaction/gas fees to acquire) are capitalized into the NFT's cost basis under IRC §1012; selling costs (e.g., gas/marketplace fees to dispose) reduce amount realized. For a creator holding NFTs in a trade or business, minting/gas costs are ordinary business expenses or capitalized to inventory rather than to a capital asset's basis. (No NFT-specific IRS ruling on gas-fee treatment; positions rest on general §1012/§263 principles.) (UNCERTAIN — no NFT-specific IRS guidance on gas/minting-fee capitalization; treatment follows general basis/capitalization rules and should be confirmed by the verifying CPA/EA.)IRC §1012 (basis = cost); IRC §263 (capitalization); IRC §1001(b) (amount realized)View source ↗

Wash sale rule does not apply

The wash sale rule of IRC §1091 applies only to losses on 'shares of stock or securities' (and contracts/options thereon). Because NFTs are treated as property and are not stock or securities, §1091 does not by its terms disallow a loss when a substantially identical NFT/digital asset is reacquired within 30 days. (Proposals to extend wash-sale rules to digital assets have not been enacted as of tax year 2025.) (Reflects current law for TY2025; legislative proposals to apply §1091 to digital assets exist but are not enacted. Crypto exposure held as a security (e.g., certain ETFs) can still be within §1091.)IRC §1091(a)View source ↗

Creator sale income is ordinary

Income a creator/minter earns from creating and selling NFTs in a trade or business is ordinary income (gross income includes 'all income from whatever source derived'), not capital gain — the NFT is property held by the creator as inventory/property of the business rather than as a capital asset. Income is included at the FMV (in USD) of consideration received.IRC §61(a) (gross income); IRC §1221(a)(1)/(a)(3) (excludes inventory and self-created property from capital-asset treatment)View source ↗

Self-employment tax on creator net earnings

A creator carrying on an NFT trade or business as an individual has net earnings from self-employment (gross income from the trade or business less attributable deductions) and owes self-employment tax. 'Trade or business' has the same meaning as in §162. Self-employment income is excluded only if net earnings for the year are less than $400.IRC §1402(a), §1402(b)(2) ($400 floor); IRC §1401 (SE tax)View source ↗

SE income exclusion floor

$400IRC §1402(a), §1402(b)(2)View source ↗

Ongoing royalty income

Royalties an NFT creator receives on secondary-market resales (e.g., via smart contract) are gross income includible at FMV in USD when received. Royalties are ordinary income; if the creator's NFT activity rises to a trade or business, the royalties are also subject to self-employment tax. Royalties are valued and included when received.IRC §61(a)(6) (royalties in gross income); IRC §1402(a) (SE tax where trade or business)View source ↗

Form 1099-DA broker reporting

Digital-asset brokers (which can include certain NFT marketplaces/custodial platforms) must report GROSS PROCEEDS of customer digital-asset sales/exchanges on Form 1099-DA for transactions effected on or after January 1, 2025 (furnished/filed beginning early 2026); cost-basis reporting phases in for transactions on or after January 1, 2026. Receiving a 1099-DA does not change the underlying property/ordinary characterization — it is an information return. (Detailed reporting mechanics belong in the dedicated reporting skill.) (Penalty transition relief applies for good-faith 2025 (filed 2026) reporting. NFT-platform broker status can be fact-dependent.)Treas. Reg. §1.6045-1 (digital asset broker final regulations, TD 10000); Form 1099-DA InstructionsView source ↗

Qualified appraisal threshold for donated NFTs

$5,000IRC §170(f)(11)(C); Treas. Reg. §1.170A-16; IRS CCA 202302012; Form 8283View source ↗

Appraisal attachment threshold for donated NFTs

$500,000IRC §170(f)(11)(C); Treas. Reg. §1.170A-16View source ↗

FMV / valuation difficulty and gifting

All NFT amounts (income, basis, amount realized, donation value) are measured at fair market value in U.S. dollars. NFTs are frequently thinly traded or unique, so a reliable arm's-length FMV may be hard to establish — this drives the qualified-appraisal requirement for donations over $5,000 and creates valuation risk on income/gain measurement. A gratuitous transfer of an NFT (not for consideration) is a gift valued at FMV for gift-tax purposes and is not an income-tax realization event to the donor; the donee takes a carryover/dual basis. (UNCERTAIN — establishing FMV for unique/illiquid NFTs is fact-specific; appraisal/valuation methodology should be confirmed by the verifying CPA/EA.)IRS Virtual Currency FAQs (FMV in USD); IRC §2501/§2512 (gift, FMV); IRC §1015 (carryover basis on gifts); IRC §170(f)(11) (appraisal)View source ↗

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The full Guide

General classification of NFTs — An NFT is a digital asset and, like other convertible virtual currency / digital assets, is treated as PROPERTY for U.S. federal income tax purposes; general tax principles applicable to property transactions apply. There is no special NFT-specific Code provision — character and timing follow the ordinary property rules. (IRS Notice 2014-21 (virtual currency = property); IRS Digital Assets / Virtual Currency FAQs Q2)
Capital vs ordinary depends on holder — Character of gain or loss depends on whether the NFT is a capital asset in the holder's hands. A taxpayer generally realizes capital gain or loss on the sale or exchange of an NFT held as a capital asset (investor/collector). If the NFT is not a capital asset (e.g., inventory/property held by its creator in a trade or business), gain or loss is ordinary. (IRS Virtual Currency FAQs Q4, Q19; IRC §1221 (capital asset); IRC §64/§65 (ordinary income/loss))
Look-through analysis for collectible status — Under a 'look-through analysis', an NFT is treated as a collectible if the NFT's associated right or asset is a collectible under IRC §408(m) (e.g., an NFT certifying ownership of a gem or a physical work of art is a collectible). An NFT whose associated asset is not a collectible (e.g., a right to a purely digital file, virtual land, or in-game item) is not a collectible. THIS IS PROPOSED GUIDANCE ONLY — the IRS announced its intent to issue guidance and requested public comments; it is not yet binding regulation. (PROPOSED — Notice 2023-27 states the IRS INTENDS to issue guidance using a look-through analysis and requests comments; until final guidance, NFT collectible status is determined under existing law on the facts.) (IRS Notice 2023-27)
Definition of 'collectible' — 'Collectible' is defined in IRC §408(m)(2): (A) any work of art, (B) any rug or antique, (C) any metal or gem, (D) any stamp or coin, (E) any alcoholic beverage, or (F) any other tangible personal property specified by the Secretary. Notice 2023-27's look-through tests the NFT's associated right/asset against this definition (read without regard to §408(m)(3), per §1(h)(5)). (IRC §408(m)(2))
28% maximum rate on collectible LTCG — 28% percent (Net long-term capital gain from the sale of a collectible held more than 1 year ('28-percent rate gain') is taxed at a maximum rate of 28% under IRC §1(h)(4) and §1(h)(5). 'Collectibles gain/loss' means gain/loss from a collectible (as defined in §408(m) without regard to §408(m)(3)) that is a capital asset held more than 1 year. If an NFT is held to be a collectible (per the proposed look-through), its LTCG is subject to this 28% cap rather than the 0/15/20% rates. (The 28% rate is a MAXIMUM; a taxpayer in a bracket below 28% pays their regular marginal rate. Application to NFTs depends on the PROPOSED Notice 2023-27 look-through.)) (IRC §1(h)(4); IRC §1(h)(5))
Holding period (short vs long-term) — If an NFT held as a capital asset is held for one year or less before sale or exchange, gain or loss is short-term (taxed at ordinary rates). If held for more than one year, gain or loss is long-term (subject to preferential LTCG rates, or the 28% maximum if treated as a collectible). (IRS Virtual Currency FAQs Q6; IRC §1222 (holding period); IRC §1223)
Basis of an NFT received / acquired — Basis in an NFT received as payment, or acquired by exchanging other property/crypto, is its fair market value in U.S. dollars at the time of receipt. Gain is recognized to the extent FMV of property received exceeds the holder's adjusted basis in what was given up; a loss arises if FMV received is less than adjusted basis. (IRS Virtual Currency FAQs Q13, Q12; IRC §1011/§1012 (basis); IRC §1001 (gain/loss))
Minting costs / gas fees — For an investor/collector who acquires an NFT as a capital asset, acquisition costs (purchase price plus transaction/gas fees to acquire) are capitalized into the NFT's cost basis under IRC §1012; selling costs (e.g., gas/marketplace fees to dispose) reduce amount realized. For a creator holding NFTs in a trade or business, minting/gas costs are ordinary business expenses or capitalized to inventory rather than to a capital asset's basis. (No NFT-specific IRS ruling on gas-fee treatment; positions rest on general §1012/§263 principles.) (UNCERTAIN — no NFT-specific IRS guidance on gas/minting-fee capitalization; treatment follows general basis/capitalization rules and should be confirmed by the verifying CPA/EA.) (IRC §1012 (basis = cost); IRC §263 (capitalization); IRC §1001(b) (amount realized))
Wash sale rule does not apply — The wash sale rule of IRC §1091 applies only to losses on 'shares of stock or securities' (and contracts/options thereon). Because NFTs are treated as property and are not stock or securities, §1091 does not by its terms disallow a loss when a substantially identical NFT/digital asset is reacquired within 30 days. (Proposals to extend wash-sale rules to digital assets have not been enacted as of tax year 2025.) (Reflects current law for TY2025; legislative proposals to apply §1091 to digital assets exist but are not enacted. Crypto exposure held as a security (e.g., certain ETFs) can still be within §1091.) (IRC §1091(a))
Creator sale income is ordinary — Income a creator/minter earns from creating and selling NFTs in a trade or business is ordinary income (gross income includes 'all income from whatever source derived'), not capital gain — the NFT is property held by the creator as inventory/property of the business rather than as a capital asset. Income is included at the FMV (in USD) of consideration received. (IRC §61(a) (gross income); IRC §1221(a)(1)/(a)(3) (excludes inventory and self-created property from capital-asset treatment))
Self-employment tax on creator net earnings — A creator carrying on an NFT trade or business as an individual has net earnings from self-employment (gross income from the trade or business less attributable deductions) and owes self-employment tax. 'Trade or business' has the same meaning as in §162. Self-employment income is excluded only if net earnings for the year are less than $400. (IRC §1402(a), §1402(b)(2) ($400 floor); IRC §1401 (SE tax))
SE income exclusion floor — $400 USD (Self-employment income is excluded only if net earnings for the year are less than $400.) (IRC §1402(a), §1402(b)(2))
Ongoing royalty income — Royalties an NFT creator receives on secondary-market resales (e.g., via smart contract) are gross income includible at FMV in USD when received. Royalties are ordinary income; if the creator's NFT activity rises to a trade or business, the royalties are also subject to self-employment tax. Royalties are valued and included when received. (IRC §61(a)(6) (royalties in gross income); IRC §1402(a) (SE tax where trade or business))
Form 1099-DA broker reporting — Digital-asset brokers (which can include certain NFT marketplaces/custodial platforms) must report GROSS PROCEEDS of customer digital-asset sales/exchanges on Form 1099-DA for transactions effected on or after January 1, 2025 (furnished/filed beginning early 2026); cost-basis reporting phases in for transactions on or after January 1, 2026. Receiving a 1099-DA does not change the underlying property/ordinary characterization — it is an information return. (Detailed reporting mechanics belong in the dedicated reporting skill.) (Penalty transition relief applies for good-faith 2025 (filed 2026) reporting. NFT-platform broker status can be fact-dependent.) (Treas. Reg. §1.6045-1 (digital asset broker final regulations, TD 10000); Form 1099-DA Instructions)
Qualified appraisal threshold for donated NFTs — $5,000 USD (A charitable contribution deduction of more than $5,000 for donated property such as an NFT/cryptocurrency requires a QUALIFIED APPRAISAL by a qualified appraiser and Form 8283 (Section B) attached to the return; for donations of $500,000 or more the appraisal itself must be attached. Digital assets are not 'cash' or a 'publicly traded security', so the appraisal exception for those does not apply, and using an exchange-reported value is not a substitute (no reasonable-cause relief on that basis). (CCA 202302012 addresses cryptocurrency; the same §170(f)(11) appraisal regime applies to a donated NFT as noncash property. A CCA is not precedent that may be cited or relied on by other taxpayers.)) (IRC §170(f)(11)(C); Treas. Reg. §1.170A-16; IRS CCA 202302012; Form 8283)
Appraisal attachment threshold for donated NFTs — $500,000 USD (For donations of $500,000 or more the appraisal itself must be attached to the return.) (IRC §170(f)(11)(C); Treas. Reg. §1.170A-16)
FMV / valuation difficulty and gifting — All NFT amounts (income, basis, amount realized, donation value) are measured at fair market value in U.S. dollars. NFTs are frequently thinly traded or unique, so a reliable arm's-length FMV may be hard to establish — this drives the qualified-appraisal requirement for donations over $5,000 and creates valuation risk on income/gain measurement. A gratuitous transfer of an NFT (not for consideration) is a gift valued at FMV for gift-tax purposes and is not an income-tax realization event to the donor; the donee takes a carryover/dual basis. (UNCERTAIN — establishing FMV for unique/illiquid NFTs is fact-specific; appraisal/valuation methodology should be confirmed by the verifying CPA/EA.) (IRS Virtual Currency FAQs (FMV in USD); IRC §2501/§2512 (gift, FMV); IRC §1015 (carryover basis on gifts); IRC §170(f)(11) (appraisal))

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US Nft Tax

Applicable period 2025Source-cited draft· Last updated Jun 23, 2026

General classification of NFTs — An NFT is a digital asset and, like other convertible virtual currency / digital assets, is treated as PROPERTY for U.S. federal income tax purposes; general tax principles applicable to property transactions apply. There is no special NFT-specific Code provision — character and timing follow the ordinary property rules. (IRS Notice 2014-21 (virtual currency = property); IRS Digital Assets / Virtual Currency FAQs Q2)
Capital vs ordinary depends on holder — Character of gain or loss depends on whether the NFT is a capital asset in the holder's hands. A taxpayer generally realizes capital gain or loss on the sale or exchange of an NFT held as a capital asset (investor/collector). If the NFT is not a capital asset (e.g., inventory/property held by its creator in a trade or business), gain or loss is ordinary. (IRS Virtual Currency FAQs Q4, Q19; IRC §1221 (capital asset); IRC §64/§65 (ordinary income/loss))
Look-through analysis for collectible status — Under a 'look-through analysis', an NFT is treated as a collectible if the NFT's associated right or asset is a collectible under IRC §408(m) (e.g., an NFT certifying ownership of a gem or a physical work of art is a collectible). An NFT whose associated asset is not a collectible (e.g., a right to a purely digital file, virtual land, or in-game item) is not a collectible. THIS IS PROPOSED GUIDANCE ONLY — the IRS announced its intent to issue guidance and requested public comments; it is not yet binding regulation. (PROPOSED — Notice 2023-27 states the IRS INTENDS to issue guidance using a look-through analysis and requests comments; until final guidance, NFT collectible status is determined under existing law on the facts.) (IRS Notice 2023-27)
Definition of 'collectible' — 'Collectible' is defined in IRC §408(m)(2): (A) any work of art, (B) any rug or antique, (C) any metal or gem, (D) any stamp or coin, (E) any alcoholic beverage, or (F) any other tangible personal property specified by the Secretary. Notice 2023-27's look-through tests the NFT's associated right/asset against this definition (read without regard to §408(m)(3), per §1(h)(5)). (IRC §408(m)(2))
28% maximum rate on collectible LTCG — 28% percent (Net long-term capital gain from the sale of a collectible held more than 1 year ('28-percent rate gain') is taxed at a maximum rate of 28% under IRC §1(h)(4) and §1(h)(5). 'Collectibles gain/loss' means gain/loss from a collectible (as defined in §408(m) without regard to §408(m)(3)) that is a capital asset held more than 1 year. If an NFT is held to be a collectible (per the proposed look-through), its LTCG is subject to this 28% cap rather than the 0/15/20% rates. (The 28% rate is a MAXIMUM; a taxpayer in a bracket below 28% pays their regular marginal rate. Application to NFTs depends on the PROPOSED Notice 2023-27 look-through.)) (IRC §1(h)(4); IRC §1(h)(5))
Holding period (short vs long-term) — If an NFT held as a capital asset is held for one year or less before sale or exchange, gain or loss is short-term (taxed at ordinary rates). If held for more than one year, gain or loss is long-term (subject to preferential LTCG rates, or the 28% maximum if treated as a collectible). (IRS Virtual Currency FAQs Q6; IRC §1222 (holding period); IRC §1223)
Basis of an NFT received / acquired — Basis in an NFT received as payment, or acquired by exchanging other property/crypto, is its fair market value in U.S. dollars at the time of receipt. Gain is recognized to the extent FMV of property received exceeds the holder's adjusted basis in what was given up; a loss arises if FMV received is less than adjusted basis. (IRS Virtual Currency FAQs Q13, Q12; IRC §1011/§1012 (basis); IRC §1001 (gain/loss))
Minting costs / gas fees — For an investor/collector who acquires an NFT as a capital asset, acquisition costs (purchase price plus transaction/gas fees to acquire) are capitalized into the NFT's cost basis under IRC §1012; selling costs (e.g., gas/marketplace fees to dispose) reduce amount realized. For a creator holding NFTs in a trade or business, minting/gas costs are ordinary business expenses or capitalized to inventory rather than to a capital asset's basis. (No NFT-specific IRS ruling on gas-fee treatment; positions rest on general §1012/§263 principles.) (UNCERTAIN — no NFT-specific IRS guidance on gas/minting-fee capitalization; treatment follows general basis/capitalization rules and should be confirmed by the verifying CPA/EA.) (IRC §1012 (basis = cost); IRC §263 (capitalization); IRC §1001(b) (amount realized))
Wash sale rule does not apply — The wash sale rule of IRC §1091 applies only to losses on 'shares of stock or securities' (and contracts/options thereon). Because NFTs are treated as property and are not stock or securities, §1091 does not by its terms disallow a loss when a substantially identical NFT/digital asset is reacquired within 30 days. (Proposals to extend wash-sale rules to digital assets have not been enacted as of tax year 2025.) (Reflects current law for TY2025; legislative proposals to apply §1091 to digital assets exist but are not enacted. Crypto exposure held as a security (e.g., certain ETFs) can still be within §1091.) (IRC §1091(a))
Creator sale income is ordinary — Income a creator/minter earns from creating and selling NFTs in a trade or business is ordinary income (gross income includes 'all income from whatever source derived'), not capital gain — the NFT is property held by the creator as inventory/property of the business rather than as a capital asset. Income is included at the FMV (in USD) of consideration received. (IRC §61(a) (gross income); IRC §1221(a)(1)/(a)(3) (excludes inventory and self-created property from capital-asset treatment))
Self-employment tax on creator net earnings — A creator carrying on an NFT trade or business as an individual has net earnings from self-employment (gross income from the trade or business less attributable deductions) and owes self-employment tax. 'Trade or business' has the same meaning as in §162. Self-employment income is excluded only if net earnings for the year are less than $400. (IRC §1402(a), §1402(b)(2) ($400 floor); IRC §1401 (SE tax))
SE income exclusion floor — $400 USD (Self-employment income is excluded only if net earnings for the year are less than $400.) (IRC §1402(a), §1402(b)(2))
Ongoing royalty income — Royalties an NFT creator receives on secondary-market resales (e.g., via smart contract) are gross income includible at FMV in USD when received. Royalties are ordinary income; if the creator's NFT activity rises to a trade or business, the royalties are also subject to self-employment tax. Royalties are valued and included when received. (IRC §61(a)(6) (royalties in gross income); IRC §1402(a) (SE tax where trade or business))
Form 1099-DA broker reporting — Digital-asset brokers (which can include certain NFT marketplaces/custodial platforms) must report GROSS PROCEEDS of customer digital-asset sales/exchanges on Form 1099-DA for transactions effected on or after January 1, 2025 (furnished/filed beginning early 2026); cost-basis reporting phases in for transactions on or after January 1, 2026. Receiving a 1099-DA does not change the underlying property/ordinary characterization — it is an information return. (Detailed reporting mechanics belong in the dedicated reporting skill.) (Penalty transition relief applies for good-faith 2025 (filed 2026) reporting. NFT-platform broker status can be fact-dependent.) (Treas. Reg. §1.6045-1 (digital asset broker final regulations, TD 10000); Form 1099-DA Instructions)
Qualified appraisal threshold for donated NFTs — $5,000 USD (A charitable contribution deduction of more than $5,000 for donated property such as an NFT/cryptocurrency requires a QUALIFIED APPRAISAL by a qualified appraiser and Form 8283 (Section B) attached to the return; for donations of $500,000 or more the appraisal itself must be attached. Digital assets are not 'cash' or a 'publicly traded security', so the appraisal exception for those does not apply, and using an exchange-reported value is not a substitute (no reasonable-cause relief on that basis). (CCA 202302012 addresses cryptocurrency; the same §170(f)(11) appraisal regime applies to a donated NFT as noncash property. A CCA is not precedent that may be cited or relied on by other taxpayers.)) (IRC §170(f)(11)(C); Treas. Reg. §1.170A-16; IRS CCA 202302012; Form 8283)
Appraisal attachment threshold for donated NFTs — $500,000 USD (For donations of $500,000 or more the appraisal itself must be attached to the return.) (IRC §170(f)(11)(C); Treas. Reg. §1.170A-16)
FMV / valuation difficulty and gifting — All NFT amounts (income, basis, amount realized, donation value) are measured at fair market value in U.S. dollars. NFTs are frequently thinly traded or unique, so a reliable arm's-length FMV may be hard to establish — this drives the qualified-appraisal requirement for donations over $5,000 and creates valuation risk on income/gain measurement. A gratuitous transfer of an NFT (not for consideration) is a gift valued at FMV for gift-tax purposes and is not an income-tax realization event to the donor; the donee takes a carryover/dual basis. (UNCERTAIN — establishing FMV for unique/illiquid NFTs is fact-specific; appraisal/valuation methodology should be confirmed by the verifying CPA/EA.) (IRS Virtual Currency FAQs (FMV in USD); IRC §2501/§2512 (gift, FMV); IRC §1015 (carryover basis on gifts); IRC §170(f)(11) (appraisal))