Non-fungible tokens (NFTs) experienced a huge spike in investor interest in 2021 before collapsing in 2022 along with the broader financial markets. However, there continues to be excitement around NFTs. Along with this interest, there remains much ambiguity in the taxation of gain from the disposition of NFTs by investors. If NFTs are considered collectibles for tax purposes, investors may be surprised by the significant difference in capital gains tax. Until there is clarity around how NFTs are taxed at the point of investment or sale, individuals or funds invested in NFTs will remain in suspense.

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