By Edward Helmore, The Guardian | Just a year ago, Washington DC’s Hirshhorn art museum – the capital’s preeminent contemporary art museum – was asking whether non-fungible tokens (NFTs) were “fad or the future of art”. Twelve months on, it looks like “tax write-off” might have been the right answer.
This year was not just the year that cryptocurrency values were burned by investor fears, rising interest rates, inflation and scandals, it was the year that crypto’s cartoonish art cousin the NFT – an electronic identifier confirming a digital collectible is real – collided with reality.
In March 2021, Christie’s sold a digital collage NFT by the artist Beeple for nearly $70m (£58m). In January pop star Justin Bieber paid $1.29m (£1m) for a “Bored Ape” NFT, a graphic of a, well, bored ape. Everyone from Michael Jordan to former first lady Melania Trump was in on the game.
Now – alongside the broader crypto market – the appetite for NFTs is so diminished that a specialized market has sprung up for collectors looking to sell off their once-valuable “digital collectibles” as tax losses to offset their income tax bills.
A recently launched service, Unsellable, aims to help collectors do exactly that. Think of it as a distressed asset fire sale.
“While every investment class has its losers, many of the NFTs we invested in were not only down big; they were now totally worthless … illiquid … unsellable,” the service says on its website.
Unsellable – which says it is “building the world’s largest collection of worthless NFTs” – buys the underlying tokens for a fraction of their original price and provides an official receipt for tax purposes.
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Go here to read the full story:
https://www.theguardian.com/technology/2022/dec/29/unsellable-worthless-nfts-tax-write-off
[Thanks to Alex Teitz for contributing this article! http://www.femmusic.com]
[Editor’s note: COMBO board members were wondering how long this “fad” would last when buyers discovered they didn’t actually own a physical product! We actually held a program on this subject and, if you are a dues-paying member, you can watch it on our YouTube channel.]
January 5, 2023| Music-Related Business| Barb Dye