Nikolas Sargeant
Non-fungible tokens or NFTs were one of the hottest trends to emerge in crypto during the last great bull run of 2021, with digital artists like Beeple and Pak capitalizing on the insane demand, tokenizing their work and selling it for millions of dollars.
The trend sparked a big surge in NFT purchases and investments, encompassing popular collections such as profile pic NFTs like Bored Ape Yacht Club, CryptoPunks, Doodles and more. They’ve emerged to become a huge status symbol associated with many different online and metaverse subcultures, and are also seen as a promising investment by crypto-focused funds.
However, the laws around NFTs and tax are far from straightforward, thanks to the complexity of the crypto landscape and the wild volatility of digital asset prices. Luckily, investors can take advantage of the best automated NFT tax reporting tools in order to minimize these headaches.
Thankfully for inventors, the growth of the NFT market has been followed by the emergence of the required tax reporting infrastructure that enables NFTs to be properly leveraged as an asset class. This is a key development for the industry as it allows big funds to explore the market, bringing much larger amounts of liquidity with them.
NFTBank
NFTBank is one of the oldest and most trusted NFT reporting tools around, having been established back in 2018 when the technology was only just emerging. It leverages cutting-edge machine learning algorithms as the backbone of a comprehensive platform for NFT asset management and portfolio performance tracking.
Investors use NFTBank as the primary gateway to oversee and manage their NFT collections, and its laser focus on the industry has resulted in the creation of various other tools. For instance, NFTBank also provides tools for identifying undervalued NFT listings, automated tax reporting, NFT valuations and more. The platform also offers a suite of developer APIs, so they can integrate NFTBank’s data within their decentralized applications.
One of NFTBank’s most famous features is its ML-powered NFT appraisal tool. Additionally, it provides tools for accessing, managing and processing NFT transaction data. The enormous dataset it aggregates acts as a repository for sales prices, trading volume, market liquidity and more.
Using NFTBank’s data, investment funds can generate customized reports on their NFT portfolios, utilizing very specific kinds of data to better understand the fair market value of these assets and also understand market trends.
The platform has grown to become an essential tool for hundreds of funds that must regularly report on their NFT portfolio performance, in line with their fiduciary responsibilities. Perhaps the best aspect of NFTBank is its personalized service, as it works proactively with stakeholders to fully understand their needs and ensure they are met.
Koinly
An all-encompassing platform that’s built to handle crypto taxes in more than 20 countries, Koinly can be used for filing with agencies including the IRS, HMRC, ATO, CRA and many others. It allows investment funds and individual investors to import their crypto trading data from over 700 sources, including many of the world’s top exchange platforms, digital wallets and more. It covers transactions across DeFi platforms, futures trading platforms and NFTs.
The beauty of Koinly is it uses artificial intelligence algorithms to match the user’s transactions across wallets and track their cost basis. With it, users can view their capital gains for any tax year and monitor the performance of their digital portfolios via its straightforward dashboard.
In addition, it allows users to download ready-made IRS tax forms such as Form 8949 and Schedule D, as well as detailed and audit-ready tax reports. It’s designed to make tax reporting for all aspects of crypto quick and easy. Moreover, its comprehensive capabilities enable it to keep track of even the most complex crypto activities, such as staking NFTs, lending and margin trading.
Cointracker
The Cointracker platform is another versatile tax reporting tool that covers user’s entire crypto accounts, automatically juggling the numbers to display exactly how much in taxes they’re expected to pay, as long as the overall performance of their portfolio. It tracks more than 2,500 digital assets over 500+ exchange platforms and wallets. It also offers a handy mobile app so investors can monitor and track their portfolio on the go.
For NFT investors, Cointracker has proven to be especially useful as it enables investors to track and manage their entire portfolio in one place.
With Cointracker’s software, filing crypto taxes is simple and accurate. The platform automates the process of filling out tax forms, and can export them to accounting software such as TurboTax.
Supported platforms include TrustWallet, Binance, Coinbase, and it provides features to help investors save money by working out the optimal way to calculate their cost basis and harvest from their tax losses.
The platform is incredibly popular, with more than one million users globally. Security is top notch too, as Cointracker does not need access to user’s private keys. What’s more, the service is free to use for anyone with fewer than 10,000 transactions per year.
