One-of-Ones: Adventures in VeVe #89

AI prompt inspired by "VeVe Memorial" ~ VVV

 

Now that taxes are out of the way, let’s talk about another heavy topic so we can be free and clear of them for the rest of the year!  

Because what I want to talk about is that irreplaceable, non-transferable one-of-one mint that resides at the top of every collection on the VeVe app and other collectible apps as well.  

That’s right, I’m talking about the collectors!  Because without us, collections are meaningless.

As many of you already know, we have recently lost several one-of-ones in our community.  Every time we lose someone, I find myself not only thinking about the recent ones, but about everyone else the VeVe community has lost over the years.  Even for those of us who didn’t know them outside of internet chats or Spaces, it’s still a reminder that we are all more than just another name behind a screen.

Fortunately, there is something quite simple that all of us can do to preserve that memory:  it is by taking care of our own one-of-ones.  By respecting our own lives a bit more, we can show respect for those we care about as well as those we’ve lost.

I admit to being kind of lousy at taking care of myself.  I’ll get on the right track for a while, then life circumstances will come along and derail my efforts time and again. 

Still… it’s not really about the grandiose efforts, is it?  It’s not about “aping in” to a gym membership that you regret less than four weeks later, or trying to give up a bad habit cold-turkey only to return to it the moment we’re under stress.

I think it’s probably more effective to make little investments in ourselves.  Just like we might dollar-cost-average into crypto or comic book collections, we could make small changes every day in hopes of them adding up over time.  It may be as simple as choosing to eat blueberries instead of cereal for breakfast, or walking to a nearby park to take a collectible snapshot instead of a showroom.  It could be using a large mint number as an exercise goal, or hitting that waitlist and auto button to get a good night’s sleep for a change.

You could even double up on goals, by getting your health up to a point you can do a walk-a-thon for cancer research, mental health, or another good cause.  It really doesn’t matter what we choose to do as long as it’s intentional.  It’s not a selfish endeavor to take care of oneself, because it also affects everyone we’re connected to.  It’s a type of paying it forward; one that often gets overlooked.

So, the next time you think of our fallen friends, I encourage you to use it to make a positive change in your life.  

Let’s not forget that every collection starts with a one-of-one.

Field Notes 7: Uncle Sam and Spider-Man

Yes, it’s about taxes. Please don't tune out, because it’s important.

This blog is different from my normal snark, so let’s start with some disclaimers! I think I’ve only done one blog with a disclaimer in the 100+ I’ve done before, and it was minor. 

So, before we begin:

This is a kitchen table–style discussion of Digital Collectibles and Crypto, focused on taxes in the United States, geared specifically for people who use VeVe and StackR. If you are in an English-speaking country, you may have some similar tax rules and laws. Now might be a great time to check them! I’m a homeschool teacher who has a kid who passed my liberal arts math brain over a year ago (aka: Wait, when did you start working with parabolas?) 

This is just an FYI.  Do Your Own Research from this point.

Being in VeVe, the whole market thing and crypto-token thing seems to happen automagically. I see Spider-Man, I buy gems, I cross my fingers and get a Spider-Man. Sometimes numbers go up. Sometimes numbers go down. But since I’ve never cashed out of VeVe, I haven’t really worried about taxes that much, figuring I’d end up doing a CSV dump with aggregate cost basis accounting and let some tax specialist check my numbers.

I have a handful of regular NFTs outside of this sort of ecosystem. The only ones I ever sold were HRO cards… but looking back, the losses were far more than the gains, so I also didn’t think about it.

But now that there’s StackR, we gotta talk about this tax thing — especially since the rules for this year’s taxes have changed a bit.

The Good, the Bad, and the Ugly

The Ugly:

There’s a new tax form for holding crypto — because of course there is. Regulation always comes with paperwork. From now on, there’s a 1099-DA form that exchanges and brokers send the IRS with gross proceeds. Also, each wallet needs its own cost basis report — you can’t lump them all in together anymore. Do NFTs held off of centralized exchanges count for this new form? Nobody knows! Ask your tax guy the best course of action for what to do about that Ape you’re still holding.

The Bad:

Since 2014, crypto coins have been labeled as digital property. When you buy an NFT or a digital collectible with a crypto coin, you are exchanging one property for a different property — which is a taxable event.

Let’s say you bought $100 of Solana that sat in your wallet for so long it’s worth $1,000, and you decide to use it to buy an NFT of a one-of-a-kind digital sock. Surprise! You got more than a digital sock — you got a taxable event! Since you only paid $100 for the Solana, you need to report that extra $900 as capital gains.

If you are cringing right now, I assure you, you are not the only one.

Since most of my collectibles are on VeVe, I just found out about it, because it never really affected me directly.

However, this is very important to keep in mind: when you trade a crypto coin for something else, it’s like cashing it in for something different. That sock probably cost you $1,300 instead of $1,000.

There is some nuance here: if you held it over a year, it’s capital gains; while under a year, it’s taxed as income. If you need more nuance, contact a tax expert.

The Good:

You also report your losses. Think you’re going to need some offset this year? You could buy some VeVe collectibles on StackR! Because let’s face it — most people are down on OMI right now.

And that means you get:

• A reportable loss.

• OMI gets burned, helping the ecosystem.

• That Partner’s Statue you always wanted.

Kind of Good:

We don’t have to worry about what to classify our NFTs as. They’re digital collectibles. The tax is the same as if we sold a physical Pokémon card.

Is 28% higher than some of the other NFTs that just count as a token representation of a utility? Yes. But we have the benefit of the fact that there’s no grey area while all other types of NFTs are trying to figure out where they line up and are waiting for more clarity. We have our clarity.

Even More Good (If it passes):

Lummis–Gillibrand Responsible Financial Innovation Act

This is a bill working its way through Congress that would ignore the first $600 of capital gains if you are using crypto to purchase something.

If you use Bitcoin to buy a pizza (please don’t do this) and you spend a hundred dollars, you don’t have to worry about paying capital gains.

It also applies to buying things like digital collectibles. If you buy a Disney collectible you’ve always wanted after OMI goes up to a penny (let’s go!), you won’t need to figure out capital gains on it.

Why this bill is important — other than the obvious: This is a bit of a sanity check. If we got to the point where we’re using (insert your favorite alt coin) on a daily basis, you don’t want to have to figure out how much Solana is worth every time you want to buy a cappuccino. The same problem holds true for buying $2 comics… nobody wants to sit there and try to figure out capital gains and losses when they’re just trying to get a stack of premium digital uncommon comics.

In Closing

Thanks for reading this FYI.  I hope it helped some people who may not have known about some of these points.

Personally, I’m glad I do most of my digital collecting on VeVe, where everything’s nice and tidy. For everyone else — more power to you, but be aware of these changes and do your due diligence.

Here are some resources on the topic if you want to learn more:

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Official Guidelines & Policy Resources

• IRS Notice 2014-21 (Crypto as Property)
https://www.irs.gov/pub/irs-drop/n-14-21.pdf

• IRS Digital Assets Page (includes NFTs)
https://www.irs.gov/businesses/digital-assets

• IRS – Reporting Digital Assets on Tax Return
https://www.irs.gov/newsroom/taxpayers-need-to-report-crypto-other-digital-asset-transactions-on-their-tax-return

• Draft Instructions for Form 1099-DA
https://www.irs.gov/pub/irs-dft/i1099da--dft.pdf

• Lummis–Gillibrand Responsible Financial Innovation Act (S.2281)
https://www.congress.gov/bill/118th-congress/senate-bill/2281/text

• Keep Innovation in America Act (H.R.1414)
https://www.congress.gov/bill/118th-congress/house-bill/1414/text

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Crypto + NFT Tax Education Resources

• Coin Center – Crypto Tax Fix Overview
https://www.coincenter.org/the-crypto-tax-fix/

• CoinTracker – NFT Tax Guide
https://www.cointracker.io/blog/nft-taxes

• Koinly – NFT Capital Gains and Tax Reporting
https://koinly.io/guides/nft-tax-guide/

• TaxBit – How NFTs Are Taxed
https://taxbit.com/blog/how-nfts-are-taxed/

• Gordon Law Group – NFT Tax Guide
https://gordonlaw.com/learn/nft-tax-guide/

• TokenTax – NFT Tax Guide
https://tokentax.co/blog/nft-tax-guide

• CoinLedger – How Are NFTs Taxed
https://coinledger.io/blog/how-are-nfts-taxed

• Blockpit – U.S. Crypto Tax Guide
https://www.blockpit.io/tax-guides/crypto-tax-usa