Those buying, selling, and creating non-fungible tokens (NFTs) in the US are about to have a much harder time doing so, as they’re getting regulated in the country.
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The H.R.3684 Infrastructure Bill has been passed, meaning crypto brokers will need to report to the Internal Revenue Service (the IRS, which focuses on taxes in the United States). Certified Public Accountant James Yochum thus took to Twitter to illustrate what this means for NFTs.
“In the business of creating/reselling #NFTs? Get used to filing Form 8300, and obtaining social security numbers and identification of your buyers,” says Yochum.
You can also find the Infrastructure Investment and Jobs Act here, on the official Congress.gov website.
H.R.3684 Infrastructure bill passed.
Digital Assets are now covered securities.
Reporting will be ushered in for all crypto brokers to report to IRS data on activity from 1/1-12/31/23 of all crypto transfers to other non US brokers (private wallets/offshore)#XRP #SEC #Ripple pic.twitter.com/TGsxZ3XMeV
— James Yochum, CPA (@JTheAccountant) November 6, 2021
Crypto purchases over $10,000 (roughly £7,378) will need to be declared to the IRS, with digital assets, including NFTs, now concerning cash. ”You’ve got 15 days to report this information on Form 8300 and violation of 6050i is a felony,” says Yochum.
“A Felony for selling NFTs, because [a] digital asset is now concerned as “cash” for this provision,” they add.
When a commenter said that digital assets aren’t considered cash until they are sold, Yochum replied: “Incorrect, for all purposes once Joe Biden signs the bill they are treated as cash for these treasury reporting requirements.”
Video game publishers have been expressing interest in NFTs as well, as Ubisoft said in a recent earnings call that it is interesting in blockchain “play-to-earn” features. CEO Yves Guillemot said the technology “will imply more play-to-earn that will enable more players to actually earn content, own content, and we think it’s going to grow the industry quite a lot.”
In other news, the Pinnacle Station DLC originally left out of Mass Effect: Legendary Edition has been added into the game on N7Day by a group of modders.