NFTs - The Emperor's New Clothes

[Keith_M]

Justin Bieber paid $1.29 million dollars for an NFT of a Bored Ape, but he and fellow celebrities have now taken out a lawsuit against Yuga Labs, the company selling variations of the Ape, now that the price has drastically crashed.

This is only one example of the craze for NFTs that saw people paying crazy prices for 'digital art'.


According to an article in The Guardian, the best way to get any monetary value out of a large number of NFTs (Non-Fungible-Tokens) is to use them as a Tax Loss.

https://www.theguardian.com/technology/2022/dec/29/unsellable-worthless-nfts-tax-write-off


If you want to get in on the action and use your NFT to offset against tax, there's a company called 'Unsellable' that'll pay you.... a penny.

[Paulie Walnuts]

I don’t get that.

If you buy an NFT for £1m and sell for 1p you’ve made a 999,999 loss. How much tax can you write off against that?

If it’s £999,999 or less then surely you’re worse off?

[CropleyWasGod]

I don’t get that.

If you buy an NFT for £1m and sell for 1p you’ve made a 999,999 loss. How much tax can you write off against that?

If it’s £999,999 or less then surely you’re worse off?


The amount of tax saved is the loss multiplied by the Capital Gains Tax rate. So if the loss is £1m, and you pay tax at 28%, (the top rate of CGT in the UK) your tax bill is reduced by £280k. You're still £720k down.

[Paulie Walnuts]

The amount of tax saved is the loss multiplied by the Capital Gains Tax rate. So if the loss is £1m, and you pay tax at 28%, (the top rate of CGT in the UK) your tax bill is reduced by £280k. You're still £720k down.

So essentially, it would be completely pointless :greengrin

[CropleyWasGod]

So essentially, it would be completely pointless :greengrin

See also the Tulip Bubble. :greengrin

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp

[Hibs4185]

The amount of tax saved is the loss multiplied by the Capital Gains Tax rate. So if the loss is £1m, and you pay tax at 28%, (the top rate of CGT in the UK) your tax bill is reduced by £280k. You're still £720k down.

When your use this to reduce your tax, you should also be automatically enrolled in a course for people being fuds with more money than sense

[CropleyWasGod]

When your use this to reduce your tax, you should also be automatically enrolled in a course for people being fuds with more money than sense

...with the course fee being the amount of tax being saved. After all, that tax relief is being paid for by us. :cb

[JeMeSouviens]

So essentially, it would be completely pointless :greengrin

I think the point is that you've already made the ridiculous, stupid purchase. Since you can't get any money back on it, the only way to soften the blow is to use it to reduce your tax bill.

[Colr]

Justin Bieber paid $1.29 million dollars for an NFT of a Bored Ape, but he and fellow celebrities have now taken out a lawsuit against Yuga Labs, the company selling variations of the Ape, now that the price has drastically crashed.

This is only one example of the craze for NFTs that saw people paying crazy prices for 'digital art'.


According to an article in The Guardian, the best way to get any monetary value out of a large number of NFTs (Non-Fungible-Tokens) is to use them as a Tax Loss.

https://www.theguardian.com/technology/2022/dec/29/unsellable-worthless-nfts-tax-write-off


If you want to get in on the action and use your NFT to offset against tax, there's a company called 'Unsellable' that'll pay you.... a penny.

Looks like Warren Buffet was right about NFTs.

[Colr]

See also the Tulip Bubble. :greengrin

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp

I recommend this to everyone:

https://www.amazon.co.uk/History-Financial-Euphoria-Penguin-business/dp/0140238565/ref=asc_df_0140238565/?tag=googshopuk-21&linkCode=df0&hvadid=310762413837&hvpos=&hvnetw=g&hvrand=712960120505703717&hvpone=&hvptwo=&hvqmt=&hvdev=m&hvdvcmdl=&hvlocint=&hvlocphy=9045989&hvtargid=pla-433039850534&psc=1