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March 21, 2023

IRS issues guidance on treatment of nonfungible tokens as collectibles and requests comments

The IRS has issued preliminary guidance (Notice 2023-27) on the tax treatment of certain nonfungible tokens (NFTs) as IRC Section 408(m) collectibles. The notice explains how the IRS intends to determine whether an NFT constitutes an IRC Section 408(m) collectible, notes that further guidance will be coming, requests comments on any aspect of NFTs that might affect their treatment as collectibles and invites public comments on a list of specific questions.

A Tax Alert is forthcoming.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor