What are the tax implications of receiving an NFT airdrop?
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3 Answers
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When I got an NFT airdrop, I counted the FMV as ordinary income on receipt, then tracked basis for later sale.
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Got my first NFT airdrop last year, and it taught me about taxes more than any wallet hack ever did. In the US, the IRS treats an NFT airdrop as ordinary income. The tax you owe is based on the fair market value of the NFT the moment you receive it. I reported that FMV as income for that year, and that amount became my cost basis for the NFT. If I later sell the NFT, I pay capital gains on the sale price minus that basis; long-term if I held it over a year, otherwise short-term. Even if you never sell, you might owe income tax on receipt. Keep records of date, FMV, and wallet, and check with a tax pro or crypto-friendly software.
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From my experience, an NFT airdrop is taxable as ordinary income when you receive it, based on its fair market value at that moment. I reported that FMV as income, and I set the NFT’s tax basis to that amount. If I later sell, I’ll owe capital gains tax on the sale price minus that basis; long vs short-term depends on holding period.
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