NFT Tax Treatment Guide

NFTs are taxed differently depending on whether you're the creator, a buyer/seller, or receive royalties — and whether the NFT qualifies as a collectible (taxed at 28% max rate). This guide walks through every NFT scenario and includes a calculator for your specific transaction.

Creator Minting & Selling

Ordinary Income Tax Rates (up to 37%)

When you create and sell an NFT, proceeds are ordinary income (like a freelance payment). File on Schedule C if you're self-employed. Gas fees are deductible as a business expense.

Collectible NFTs (art, trading cards, sports)

28% Max Capital Gains Rate

IRS Notice 2023-27 treats NFTs that give rights to a physical/digital collectible (art, sports cards, gems) under the 28% collectibles capital gains rate — higher than the standard 20% long-term rate.

Trading / Investing (non-collectible)

Short-term: ordinary rates / Long-term: 0–20%

Buying and selling non-collectible NFTs follows standard capital gains rules. Held ≤1 year = short-term (ordinary rates). Held >1 year = long-term capital gains rates.

Royalty Income

Ordinary Income — Self-Employment Tax Applies

Secondary sale royalties paid to creators are ordinary income. If you're an active creator, SE tax (15.3%) applies in addition to income tax. Report on Schedule C.

Calculate Your NFT Gain / Loss

Transaction Type

Sale / Royalty Amount ($)

Cost Basis / Creation Costs ($)

Your Marginal Income Tax Rate (%)

Gross Amount

Cost Basis

Net Gain / Loss

Applicable Tax Rate

Estimated Tax Owed

Net After Tax