That doesnt seem logical - the purchase of the NFT is a capital loss, which should offset the gains of the 30k of capital gains. Otherwise, it's an unfair tax regime.
That doesnt seem logical - the purchase of the NFT is a capital loss, which should offset the gains of the 30k of capital gains. Otherwise, it's an unfair tax regime.
I don't fully understand how NFT losses are treated (i.e. do you get a capital loss?) but the issue is with timing. THe tax man is not going to wait until you possibly convert to their currency to collect taxes; the gains and losses get attributed to the year when the transaction occurred. The high volatility in the investment is what makes the crazy swings possible - but this risk really should be priced into the expected return. I wouldn't be surprised if NFT gains are treated more like lottery winnings (in many jurisidictions); it's taxed at payout against the current year situation, regardless of what you do with it.
In the US, you can offset the gain, if the loss happens in the same year. If it happens later, then you're supposed to have paid the taxes in the year with the gain. The later loss can be used to offset gains after that.
It seems to be similar in New Zealand, where the article says that (like the US) there's tax due when you exchange one token for another without going out to fiat. A lot of investors didn't realize that and didn't pay their tax in that first year, and then didn't have the money later when the government came collecting.