Las Vegas, NV – August 5, 2025 — The NFT boom may be over, but those once‑prized digital collectibles still hold surprising value—not on the marketplace, but on your tax return.

IRS Rules on NFTs

The IRS treats NFTs as digital assets and property, not currency (irs.gov). This means NFT sales, trades, or donations must be reported, just like stocks.

• Profits are taxable as capital gains.
• Losses can be deducted under certain conditions.
• Donations to charities may qualify for tax breaks.

Donating NFTs to Charity

NFT donations to IRS‑recognized 501(c)(3) charities are tax‑deductible. If the NFT was held for over a year, donors may deduct the fair market value. For NFTs held less than 12 months, the deduction is limited to the purchase cost (blockpit.io).

Charities must file specific IRS forms when receiving and disposing of NFTs, including Form 8282 if sold within three years (mwe.com).

Using Worthless NFTs for Tax Breaks

Many NFTs have collapsed to near‑zero value. Investors are turning to tax‑loss harvesting, disposing of these tokens to offset other taxable gains. Options include:

• Burning the NFT.
• Selling it for minimal value.
• Donating it directly to charity.

Even if an NFT is considered worthless, donors may still deduct their cost basis, provided they follow IRS reporting rules and, for larger donations, obtain a qualified appraisal (gordonlaw.com).

Watch Out for Collectible Classification

The IRS is weighing whether NFTs tied to art or similar assets should be taxed as collectibles, which could mean a higher 28% tax rate on long‑term gains (investopedia.com).

The Bottom Line

For NFT holders frustrated by worthless tokens, the silver lining may be on their tax return. By donating or disposing of NFTs properly, investors can turn losses into deductions—while also supporting charitable causes.

Even in decline, NFTs can deliver hidden financial value. Before donating or harvesting losses, seek professional advice to stay compliant—and make the most of

Please leave this field empty

Don’t miss the IMPORTANT news!

We don’t spam! Read our privacy policy for more info.

Check your inbox or spam folder to confirm your subscription, and start receiving news straight to your email.

Please leave this field empty

What Happens in Vegas?

Straight to your email.

We don’t spam! Please read our privacy policy for more information.

Check your inbox or spam folder to confirm your subscription.

Jake Monroe

Crime and courts reporter covering law enforcement, court cases, and breaking incidents across Southern Nevada.