“If the world of cryptocurrency is a platter of juicy, tender, piping hot chicken wings… then taxes are the sad-looking celery sticks sitting off to the side. Nobody wants them there, but they’re part of the package. Oh, and if you don’t eat all your celery, you might go to jail.”
In this blog post, I’ll be talking about The NFT Tax Guide that launched on Tuesday, October 26, 2021. For .08 ETH, you get access to the crypto tax guide written by leading tax professionals as well as the Executive subscription to ZenLedger - a crypto tax software that includes unlimited transactions, DeFi, staking, NFTs and more. These materials offer tax guidance but are not tax or financial advice. Last but certainly not least, each NFT comes with artwork from the legendary Sartoshi!
The most commonly asked question I’ve received is: “What’s in the guide?” So, let’s start there. The guide is accessible on the nfttaxguide.com website. It is token gated, which means that you must have purchased the NFT Tax Guide and hold it in your wallet that connects to the site.
The guide has 5 different sections:
Crypto Tax Basics
Capital Gains
Ordinary Income
Non-Taxable Transactions
NFTs
NFT Taxes for Consumers
NFT Taxes for Creators
Play-to-Earn Gaming
DeFi (Decentralized Finance)
Borrowing
Lending, Liquidity Pools, Earning Interest
Wrapping Coins
Liquidation
Gas Fees
DAOs
When DAO Tokens Increase in Value
Receiving Dividends or Other Income in Crypto
K-1 Forms
Starting a DAO
Filing Tips
Assorted Compliance Tips
Puerto Rico and Other Crypto Tax Havens
How to Report Crypto on your Tax Return
The guide is written colloquially yet clearly. It runs through scenarios that are common to NFT degens in language that is accessible and fun. We learn how to report taxes when two friends - Elyse and Adrian - pool funds together to purchase an NFT. We see how to outline the process of burning and minting exchange through the lens of FVCKRENDER BALANCE tokens and FVCK_CRYSTALS//. We examine the way the IRS would likely view Axie Infinity scholarships, and how to conservatively accommodate for this in our annual taxes. When reading the guide, it feels like the experts are talking directly to you and using shared NFT cultural moments as touchstones to convey a greater message about taxes.
In addition to the guide, all NFT Tax Guide holders get access to ZenLedger’s premier software. Why ZenLedger? The founding team of the guide spoke with over six different crypto tax software to evaluate the quality and range of different tax services offered. While many companies have strong crypto-coin focused programs, NFTs present a newer tax challenge that limited the options available. Furthermore, the founding team sought a company that had in-person support for all NFT Tax Guide holders. ZenLedger met these requirements and outperformed the other companies.
ZenLedger has been recognized by Bloomberg, Forbes, WSJ, and CoinDesk as a leading crypto tax company. For covering such a technical industry, the process for filing taxes using ZenLedger is relatively straightforward. First, you import your transactions using ZenLedgwer’s crypto tax tool. You can connect your wallet or exchange account via a read-only API, CSV or public receiving address to create a complete crypto tax report. Then, you review your transactions to ensure you’ve imported successfully. ZenLedger’s custom-built resolution center will help you identify any missing transactions to ensure accurate reports. Finally, you download your forms. ZenLedger will instantly generate your tax forms including Form 8949, Schedule 1, and Schedule D. Also included are the exclusive Tax-Loss harvesting tool and grand unified accounting reports.
The NFT Tax Guide provides holders with the ZenLedger executive plan that retails at $399 per year. The executive plan will process unlimited transactions, provide detailed reports and premium support for NFTs, DeFi, and Staking. In addition, ZenLedger offers TurboTax integration, services airdrops and will introduce you to a crypto tax professional to get your crypto and non-crypto taxes done if you desire.
The truth is that U.S. taxpayers are required to report all income and pay the correct amount of taxes. The IRS can assess non-filing penalties, non-payment penalties, underpayment penalties, negligence penalties, and more. Where tax evasion or tax fraud is involved, the consequences can include prison time. Coming from tax professionals who dig through users’ records daily and defend cryptocurrency audits, it’s easy to find all your transactions. Even on foreign exchanges. In light of this, you want to play it safe. And, the best way to do that is to purchase the tax guide.
The NFT Tax Guide is meant to provide you with utility and help make taxes easy for you. It would not have been possible without the help of these individuals: Jacob Martin, Charles Kolstad, Andrew Gordon, Alex Roytenberg, ZenLedger, Hannah Lorenz, Backseats, and Kilroy. Special shout out to Plaid Shaman Design and FutureProof for making the guide easy on the eyes and accessible to all!
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