![]() Even seemingly trivial in-game item swaps can have tax implications. If you converted your NFT into a cryptocurrency before cashing out, that counts as two separate investment transactions. Did you sell it less than a year after you bought it? (The answer is almost certainly "yes," given the timing of the play-to-earn boom.) Well, then it's a short-term capital gain. ![]() ![]() But it turns out the play-to-earn model also has the incredibly inconvenient side effect of turning even minor actions taken in a video game into taxable events.ĭid you sell your cute digital creature on Axie Infinity? That's a taxable event. In a matter of months, NFT gaming became a multibillion-dollar industry by combining two things people already loved: video games and getting rich from crypto.
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