How NFTs are Taxed in 2025-2026
If you’ve bought, sold, minted, traded, or earned royalties from NFTs in the last few years, this is the only guide you need before filing your 2025 taxes.
The #1 Rule Everyone Gets Wrong
An NFT is property, not currency. That means almost every action triggers a tax event.
- Buying an NFT with ETH, BTC, or SOL → taxable disposal of the crypto
- Selling or trading an NFT → capital gain or loss
- Receiving an NFT airdrop or reward → ordinary income at fair market value
- Earning creator royalties → ordinary income the moment it hits your wallet
NFT Taxes in the United States (2025 IRS Rules)
The IRS treats NFTs exactly like stocks or real estate.
Buying an NFT
You trigger capital gains tax on the cryptocurrency you spent.
You trigger capital gains tax on the cryptocurrency you spent.
Selling or Trading an NFT
Capital gain = sale price − cost basis (what you paid + gas fees).
Held >1 year → long-term capital gains (0–20% + 3.8% NIIT)
Held <1 year → ordinary income rates up to 37%
Capital gain = sale price − cost basis (what you paid + gas fees).
Held >1 year → long-term capital gains (0–20% + 3.8% NIIT)
Held <1 year → ordinary income rates up to 37%
Minting an NFT
Cost basis is usually just the gas fees. If the floor instantly pumps, the IRS can argue you have income at the first tradable moment.
Cost basis is usually just the gas fees. If the floor instantly pumps, the IRS can argue you have income at the first tradable moment.
Creator Royalties
Every royalty payment is ordinary income (reported on Schedule C if you’re a creator).
Every royalty payment is ordinary income (reported on Schedule C if you’re a creator).
NFT Airdrops & Free Mints
Taxed as ordinary income at fair market value the day you gain control — even if you never sell.
Taxed as ordinary income at fair market value the day you gain control — even if you never sell.
NFT Tax Rules Around the World (2025-2026)
United Kingdom
Capital gains tax (10–20%). Frequent flipping = trading income up to 45%.
Canada
50% of capital gains taxable (or 100% if considered business income).
Australia
Standard CGT. Heavy traders get reclassified as carrying on a business.
Germany
Hold >1 year as a private sale → completely tax-free. Under 1 year = fully taxable
France
Flat 30% (PFU) or progressive rates + social charges.
The Most Expensive NFT Tax Mistakes in 2025
- Thinking NFT-for-NFT trades are tax-free → every swap is two taxable events
- Ignoring creator royalties → every 2.5% payout is ordinary income
- Assuming a free mint has $0 cost basis → many jurisdictions tax the FMV on day one
- Forgetting gas on failed mints → usually deductible as a capital loss
- Fractionalizing or wrapping NFTs → taxable disposal
How to Legally Reduce Your NFT Taxes in 2025-2026
Depending on where your tax residency is…
- Hold longer than 12 months wherever possible
- Harvest losses aggressively on washed-out collections
- Use HIFO/LIFO accounting when you own multiple floor pieces
- Donate appreciated NFTs to charity → deduct FMV and skip capital gains
What Changes in 2026-2027
Starting January 2026:
- OpenSea, Blur, Magic Eden, Tensor and others will report your NFT sales directly to tax authorities (OECD CARF + US Form 1099-DA)
- No more “I forgot about that Pudgy Penguin” excuse
Final Thoughts
NFT taxes don’t have to be a nightmare. With proper tracking and the right strategies, most people overpay by 20–50% simply because they (or their accountant) don’t understand the rules above.
We’ve handled hundreds of NFT portfolios. From Bored Apes to Pudgy Penguins to HyperEVM NFTs, we’ve saved clients seven figures in unnecessary tax.
Ready for a free fixed-fee quote with zero surprises and no private keys required? Click the button below.
