What are NFTs and why should tax accountants care?

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According to Accounting Today, tax rules surrounding NFTs or nonfungible tokens are not clear. NFTs are basically digital assets whose data is stored in a blockchain, similar to cryptocurrency like Bitcoin and Ethereum.

Questions:

  1. What can NFTs digitally represent?
  2. Why are NFTs a kind of a goldmine for the IRS?
  3. What Internet sites specialize in selling NFTs? Have any traditional sellers tackled NFTs?

Source:

Cohn, M. (2021). Tax guidance on NFTs remains a murky area. Accounting Today, August 6 (Retrievable online at https://www.accountingtoday.com/news/tax-guidance-on-nfts-remains-a-murky-area?)