The Harvesting of NFT Tax Losses Increases as the Year-end Deadline Approaches

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Last Updated on January 2, 2024 by Bitfinsider

As the end of the year approaches, NFT traders are finally finding a use for their worthless tokens: selling them for pennies to offset capital gains on their taxes. And, with the IRS’s criminal investigative branch reportedly taking a special interest in cryptocurrency cases, now may be a better time than ever to sell faulty tokens.

The approach, known as tax loss harvesting, assists traders who are fortunate with some assets but unlucky with others in minimizing their taxable burden, thus saving them money. But, with so many dormant or abandoned NFT projects, who will buy worthless NFTs?

Harvest.Art, Unsellable NFTs, and Sol Incinerator are projects that aim to purchase worthless NFTs in order to assist traders in tax loss harvesting.

It may be a better time than ever for cryptocurrency dealers to think about their tax obligations. According to a Bloomberg story, the Internal Revenue Service’s (IRS) criminal investigative branch has began looking into crypto tax fraud, when only a few years ago the majority of cases involved money laundering.

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