Are you wondering about whether OpenSea report to IRS or not? Or, Is it required to pay taxes on non-fungible tokens? If yes, then you have chosen the right article to read.
Keep scrolling, and all your doubts will be cleared regarding the topic of whether you will have to pay taxes on NFT or OpenSea?
Also, how is the NFT AirPods taxed? By the end of this article, you will learn the step-by-step process to download tax documents from OpenSea and a relevant answer on “Can IRS track NFTs?”
Does OpenSea Report To IRS?
As per the privacy policy of OpenSea, the company has the authority to disclose its user data to comply with government rules and regulations.
Additionally, the platform of OpenSea reserves a right to report users’ transaction details to the Internal revenue system.
Do You Pay Taxes On NFT?
When you sell Non-fungible tokens, it is mandatory to file tax on your profits because they fall under the income. It will be taxed per your tax rate, which is 28%. The tax rate you pay on your NFT transactions will vary the on the situation.
Depending on the specific situation, it can be taxed as short term, long term, and or income. Let’s understand each situation separately.
Income:
If you have gained cryptocurrency through mining or staking, which is regarded as an ordinary income slab and will be taxed, it ranges between 10% to 37% depending upon your income level.
Long-Term Capital Gains:
suppose you help crypto for over one year. Then you will be liable to pay a tax rate of 0% to 20%, which depends on your income.
Short-Term Capital Gains:
Suppose you hold your cryptos for less than a year, then your income will be subject to the rate of short-term capital gain. This income will also be treated as exact as income slab, i.e., 10% to 37%, depending on how much you make money as your earning.
Do You Have To Pay Taxes On OpenSea?
Yes, You have to pay taxes on your benefits earned through OpenSea. The rates are ordinary as per the rates of your income slab and can vary between 10 to 37 percent.
How Are NFT AirDrops Taxed?
The whole process of creating an NFT is complete;y free but whenever you will sell it, you will have to pay a certain tax. You need to pay taxes on the profit that you will earn with the NFT.
For this, you will have to pay taxes under your normal income slab only. This is because your profits from NFTs are considered your income only. So, these AirDroped NFTs are always taxed. The tax rate can vary between 10 to 37%.
Can IRS Track NFTs?
Yes! The Internal Revenue Systems can track the NFT’s benefits and transactions. The department may ask you to submit a report if doing transactions above a certain limit.
As per the government guidelines, the platform of OpensSea can share the relevant details with the government if needed.
Final Words
OpenSea’s privacy policy clearly states that they can share users’ data with the internal revenue system or government if needed. However, the earning of NFTs falls under the income so you have to pay tax as per the tax slab mentioned above.
