Some NFTs May Be Collectibles, and Why That Matters

In a recent development, the Internal Revenue Service (IRS) has issued Notice 2023-27, which announces its intention to provide guidance on the treatment of specific nonfungible tokens (NFTs) as collectibles under ยง408(m) of the Internal Revenue Code. This treatment is relevant for other purposes of the Code, including the long-term capital gains tax rate under […]

Hobby Loss Rules — You Probably Can’t Deduct That

When it comes to taking a loss on a business activity for tax purposes, it’s important to understand that the activity must be engaged in as a for-profit venture, with a profit motive behind it. However, some wealthy individuals try to use hobbies as a way to create abusive tax shelters, running a fake business […]