7727.07 / How is the value of an NFT determined for purposes of determining gain or loss on a sale or disposition?

Determining the value of a non-fungible token can be difficult if there is no market value information available to which the asset can be compared. Typically, the fair market value of property is determine based on what a willing buyer will pay a seller, assuming all parties have all relevant information about the asset.

One problem that may arise in valuation cases involving non-fungible tokens is that, by their nature, no two non-fungible tokens are exactly the same.

However, in cases where the NFT’s value is substantial, it may be advisable to obtain an independent appraisal to establish valuation that will satisfy the IRS (similarly to when a taxpayer sells a unique work of art or antique).