United States of America: Consultation closed on guidance on taxation of NFTs as collectibles

On 19 June 2023, the consultation on the proposed guidance on the taxation of non-fungible tokens (NFTs) closed. The guidance was proposed by the Internal Revenue Service (IRS) and the Treasury Department (Treasury). Both agencies aim to gather information on whether NFTs can be considered collectable under tax law. The guidance aims to determine the status of NFTs through "look-through analysis". In particular, the NFTs could only be considered collectable if their asset is considered collectable. For instance, if one has an NFT ownership certificate of a gem, which is collectable, then its NFT is also regarded as collectable. The guidance aims to determine whether there are any legal challenges to the "look-through analysis" and what other factors could influence the collectable categorisation.