Abstract
Virtual land non-fungible tokens (“NFTs”) used in the metaverse have been around for fewer than five years. As such, there is very little guidance from the Internal Revenue Service (“IRS”) regarding how transactions dealing in virtual land are taxed federally. This Note covers an introduction to NFTs and their underlying technology and development. Then, it addresses the differing tax implications of buying virtual land, renting virtual land (both from a landlord and tenant perspective), and selling virtual land. The IRS solicited public comments on how best to approach NFTs and various relevant considerations. But until the IRS establishes more detailed guidance, this Note argues that the look-through analysis should continue distinguishing between digital art NFTs and non-art NFTs, including virtual land NFTs. Additionally, this Note proposes solutions for future tax filing forms.
How to Cite
66 Ariz. L. Rev. 505 (2024)
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