Tax Alerts

IRS Requests Comments on Treating NFTs as Collectibles, Notice 2023-27

The IRS requested comments on its intention to treat certain nonfungible tokens (NFTs) as collectibles under Code Sec. 408(m). If an NFT is treated as a collectible, an IRA’s acquisition of the NFT would be treated as a distribution equal to the cost of the NFT. In addition, treating NFTs as collectibles would affect the long-term capital gains tax rate under Code Sec. 1(h). For this purpose, the IRS defines an NFT as a unique digital identifier that is recorded using distributed ledger technology and may be used to certify authenticity and ownership of an associated right or asset, such as a digital file, digital music, the right to attend a ticketed event, or ownership of a physical item.

Pending the issuance of the anticipated guidance, the IRS intends to determine whether an NFT is a collectible by analyzing whether the NFT’s associated right or asset is a Code Sec. 408(m) collectible. Under this “look-through analysis,” if the NFT’s associated right or asset is a Code Sec. 408(m) collectible (for example, an NFT that certifies ownership of a gem), then the NFT is treated as a collectible. Similarly, if the NFT‘s associated right or asset is not a collectible (for example, a right to use a plot of land in a virtual environment), then the NFT is not treated as a collectible. If the NFT‘s associated right or asset is a digital file, the IRS would apply the look-through analysis by asking whether the digital file constitutes a “work of art” under Code Sec. 408(m)(2)(A). If it does, the NFT would be a Code Sec. 408(m) collectible.

The Treasury and IRS requested comments on any aspect of NFTs affecting an NFT’s treatment as a Code Sec. 408(m) collectible. In particular, the IRS solicited comments on the definition of NFTs, how the look-through analysis might be applied to an NFT with more than one associated right or asset, and what factors to consider in determining whether a digital file associated with an NFT is a “work of art.”

FL - Taxpayer did not qualify as private trust

The Florida Department of Revenue (department) determined that a taxpayer was not a private trust excluded from the definition of […]

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FL - Taxpayer did not qualify as private trust

FL - Governor proposes tax cuts in state of the state address

In his State of the State Address, Florida Gov. Ron DeSantis proposed $1.1 billion in tax cuts, the continuation of […]

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FL - Governor proposes tax cuts in state of the state address

FinCEN Commences Beneficial Ownership Reporting Under Bipartisan Corporate Transparency Act

The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), has begun accepting beneficial ownership information report under the bipartisan Corporate Transparency Act, enacted in 2021. This effort requires companies doing […]

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FinCEN Commences Beneficial Ownership Reporting Under Bipartisan Corporate Transparency Act

Employee Benefit Plan Filing Extension Procedures Updated

Starting in 2024, Form 5558 is no longer used to request an extension of time to file Form 5330, Return of Excise […]

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Employee Benefit Plan Filing Extension Procedures Updated

More Than 1,000 Projects Registered Through IRS ECO Tool, IR-2024-14

The Internal Revenue Service said that more than 1,000 projects have been registered through the agency’s Energy Credits Online tool. The tool was created to help taxpayers who are taking […]

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More Than 1,000 Projects Registered Through IRS ECO Tool, IR-2024-14

IRS Encourages Taxpayers to Get Ready for 2024 Filing Season, IR-2024-1

The IRS has encouraged taxpayers to utilize tips, tools and other resources available on the IRS website to Get Ready for 2024 filing season. The agency is set to announce the start […]

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IRS Encourages Taxpayers to Get Ready for 2024 Filing Season, IR-2024-1

Transitional Guidance on Reporting of Information on Receipt of Digital Assets Announced, Announcement 2024-4, IR-2024-12

The IRS has provided transitional guidance under Code Sec. 6050I with respect to reporting transactions involving receipt of digital assets. The Service has further clarified that at this time, digital assets are not required […]

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Transitional Guidance on Reporting of Information on Receipt of Digital Assets Announced, Announcement 2024-4, IR-2024-12

IRS Announces Leadership Restructuring, IR-2023-237

The IRS Commissioner, Danny Werfel, has announced plans for new leadership structure to align with transformation goals. The updated chart, the first in two […]

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IRS Announces Leadership Restructuring, IR-2023-237

IRS Updates List of Qualified Census Tracts for Qualified Mortgage Bonds and Mortgage Credit Certificates, Rev. Proc. 2024-08

The IRS has provided issuers of qualified mortgage bonds and issuers of mortgage credit certificates with an updated list of qualified census tracts for each state, the District of Columbia and Puerto Rico. […]

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IRS Updates List of Qualified Census Tracts for Qualified Mortgage Bonds and Mortgage Credit Certificates, Rev. Proc. 2024-08

IRS: Taxpayers and Tax Professionals Should Protect Themselves from Scams, IR-2023-223, IR-2023-224, IR-2023-226, IR-2023-227, IR-2023-229

As the National Tax Security Awareness Week concludes, the IRS emphasized on the ongoing need for taxpayers and tax professionals to stay […]

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IRS: Taxpayers and Tax Professionals Should Protect Themselves from Scams, IR-2023-223, IR-2023-224, IR-2023-226, IR-2023-227, IR-2023-229