IRS expands key US tax language to include NFTs

The tax division of the Treasury Department released an updated draft for its 2022 instructions for form 1040 filers that swaps the old category for “virtual currency” with broader new language on “digital assets,” including an explicit recognition of NFTs.

Hodlers may benefit from longer-term capital gains tax of 0%-20%. Traders who enter and exit more quickly could pay up to 37% tax, according to BeInCrypto.