- Unsellable is giving collectors an option to cash out their NFTs at a loss.
- They can then write off the losses against their tax burden.
- NFTs have recently attracted interest from regulators with some introducing taxes on capital gains from NFT sales.
According to Chainalysis NFT transaction volume dropped by nearly 87% over the past eight months amid the crypto winter. Subsequently, non-fungible tokens that were once worth millions of dollars have lost value.
Recently, American YouTuber turned-boxer and now Wrestler, said his NFT, which he bought for $623,000 dollars is now worth a mere $10.00. While the valuation differential is alarming, it goes to show the impact of fear in the market.
But a new platform has come up with the famous words “fear not”. Unsellable is offering holders of worthless NFTs a way out. According to a report by the UK publisher The Guardian, the platform is offering investors an opportunity to cash out their NFTs at ridiculously low prices.
Unsellable thinks since many governments have swooped in to regulate NFTs, adding them to taxable items, could be a blessing in disguise amid the bear market. Founder Skyler Hallgren’s Unsellable NFT platform is buying NFTs for a fraction of the original price in exchange for an official receipt that can be used for tax purposes.
In October, the US Internal Revenue Service (IRS) revised the wording around NFTs, classifying them under digital assets. Digital assets like crypto and other tokens are subject to US capital gains tax, which averages 15% for most individuals.
According to US tax law, a capital loss can be used to offset other capital gains or income made from the sale of stock, bonds, mutual funds or real estate. Unsellable claims that traders with unrealised NFT losses worth millions could use its platform to lower their overall tax burden.
“We realized there was a practical problem that was locking up a lot of resources and we could create a lot of value for people by offering to buy up their worthless NFTs and allow them to harvest the losses,” said Hallgren. “For some folks, the amount they paid for NFTs is quite high and were buying them for a penny so the write-off they can take is quite high.”
According to Hallgren, Unsellable already boasts more than 5,000 NFTs on its platform, with the founder expressing optimism that the number could rise to 15,000 by the end of the month.
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