NFT Taxation Hinges on Single Fact: IRS Treats NFTs as Property

The IRS treats NFTs as property, not currency, and this classification drives everything else when it comes to taxation. Creators who mint and sell NFTs generally owe ordinary income tax and self-employment tax, while collectors who buy, hold, and flip NFTs owe capital gains or losses on each sale.

Art-like or 'collectible' NFTs may be subject to a higher long-term capital gains tax rate than the standard brackets. Marketplaces now issue Form 1099-DA, so the IRS sees more of your activity than it did two years ago.

To prepare for filing in 2026, log every transaction with a date, USD value, and wallet address. Save the exact timestamp of each buy, sale, or mint, including the USD price at that time. Pull your marketplace 1099-DA (if issued) and reconcile it against your own records before you file.