Taxation for Cryptocurrency, NFTs and Other Digital Assets Still in Its Infancy in the US

Various tax positions are being taken and therefore shown to the Internal Revenue Service on tax returns filed over the last few years, an indication the market is coming to a consensus on how certain digital assets and transactions should be categorized and taxed. Whether the IRS will agree with these “tax cubbyholes,” however, is another question entirely. There are also industry participants who believe that digital assets should require new tax rules because of their newness, though I’d argue that every asset and transaction, no matter how new or old, has always fit within an existing cubbyhole in the U.S. tax system. The government may write special rules regarding the treatment of the new asset within the cubbyhole, but there will be an existing tax bucket for every new idea.