@nuconomist
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Friday, 31 Mar 2023
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Reading time:
4 mins
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It's a taxing time of year for many...
If you are one of the many that trade NFTs (Non Fungible Tokens) for profit, then tax time can be interesting painful. While dates vary around the world, inevitably there is a cut-off where all profits (or losses) made in the year preceeding that date are locked in and if you've come out on top, then you'll have a bill to pay. For many of you, that time is about now...
If you've been meticulously tracking your trades in their native digial currency as well as your local fiat currency and putting money aside, well done you!
However, if you shoot a little more from the hip, working these things out can take a long time... And once you have, you better hope that you haven't got more than planned stored in illiquid jpegs. There can be a race to the bottom as people race to sell off assets before the deadline to lock in gains and losses.
Whether you're up or down, remember this moment and try to make a habit of planning for it in advance so that you aren't caught in the last minute race next time it comes around.
Even better, keep a running tally throughout the year and you'll know exactly where you stand so you don't accidentally fall into "tax leverage" where you are trading with money that you literally can't afford to lose.
Not the most exciting newsletter in the world to kick off the series, but an important one none the less. Also please keep in mind, that none of this should be considered tax or financial advice. The laws here are complex so you should always consult a local professional if you aren't sure. And as this is all emerging tech, you will need to make sure they know what they are doing, so it may cost a little more than your average filing if they are having to dig through thousands of trades, collateral contracts and more.
Luckily you can automate some of that stuff. While none of the tools I've found so far are perfect, I can recommend cointracking.info (referral link) for getting most of the way there. That said, if you know of something better, please tell me! I'm always open to better ways of doing things.
That's all for today folks!
In future newsletters we'll be talking about slightly more "fun" topics, at least in my eyes. So make sure you're subscribed to hear about:
Potential Airdrops
New NFT Projects
Crypto Payment Solutions
Metaverse Experiences
Much more...
If I haven't mentioned something that you are interested in, please feel free to reach out and I may add to the list of topics for future issues.
This email contains referral links and I may receive a commission if you decide to purchase. However, I only recommend products that I use and/or genuinely believe in.
