How to Report Solana NFT Taxes

NFTs are treated as property by the IRS, just like any other crypto asset. Whether you're minting, flipping, or collecting royalties, here's what you owe.

Minting an NFT Establishing cost basis

Minting is the moment an NFT is created on-chain and transferred to your wallet. From a tax perspective, minting is usually straightforward — the amount you paid to mint becomes your cost basis in the NFT.

✓ The SOL (or other token) you spend to mint = your cost basis in the NFT, converted to USD at the time of minting
✓ Transaction fees (network fees, priority fees) paid during the mint can be added to your cost basis
✓ Free mints: your cost basis is $0 plus any gas fees paid. If you later sell, the full sale price is your gain.
— The date of minting starts your holding period — relevant for short-term vs long-term capital gains treatment when you sell

Example: Mint an NFT for 2 SOL when SOL = $150

  Amount paid:  2 SOL x $150 = $300
  Gas fees:     0.001 SOL x $150 = $0.15

  Your NFT cost basis: ~$300.15
  Holding period starts: date of mint transaction
            

Buying an NFT Secondary market purchases

Buying an NFT on a secondary marketplace like Magic Eden or Tensor involves two simultaneous tax events: you dispose of the SOL you used to pay, and you acquire the NFT with a new cost basis.

✓ Spending SOL to buy an NFT = a taxable disposition of that SOL (capital gain or loss on the SOL)
✓ Your NFT cost basis = the fair market value of the SOL you spent, in USD, at the moment of purchase
✓ Marketplace fees paid (e.g., 2% platform fee) can be included in your cost basis
— You need to know your cost basis in the SOL you spent — this requires tracking when and at what price you originally acquired that SOL

Example: Buy an NFT for 5 SOL when SOL = $150

  Original SOL cost basis: $100 each x 5 SOL = $500
  Sale proceeds on SOL:    $150 each x 5 SOL = $750
  Capital gain on SOL:     $750 - $500 = $250  (report this)

  NFT cost basis:          $750  (your new acquisition cost)
  NFT holding period starts: date of purchase transaction
            

This is why you need to track your SOL holdings carefully — every time you spend SOL (including on NFTs), it's a taxable event for that SOL.

Selling an NFT Capital gains event

When you sell an NFT, you realize a capital gain or loss. The math is simple in principle, though getting the inputs right requires good records.

✓ Proceeds = the USD value of what you received (SOL or other tokens) at the moment of sale
✓ Cost basis = what you originally paid (minting cost, purchase price, fees)
✓ Gain or loss = Proceeds minus Cost basis
✓ Short-term if you held it less than 1 year — taxed as ordinary income
✓ Long-term if you held it more than 1 year — taxed at preferential capital gains rates (0%, 15%, or 20%)
— Royalties you paid to the creator on the sale can reduce your net proceeds, lowering your taxable gain

Example: Sell an NFT for 8 SOL when SOL = $200

  Proceeds:              8 SOL x $200 = $1,600
  Minus creator royalty: $1,600 x 5% = -$80
  Net proceeds:          $1,520

  Cost basis:            $750 (what you paid at purchase)
  Capital gain:          $1,520 - $750 = $770

  Held 14 months → Long-term capital gain
            

Creator Royalties Ordinary income

If you created an NFT collection and earn royalties whenever your NFTs are resold on secondary markets, those royalties are taxable income — not capital gains.

✓ Royalties received = ordinary income, taxed at your marginal income tax rate
✓ Record every royalty payment: date received, amount in SOL, and USD value at time of receipt
✓ Your cost basis in the SOL you receive as royalties = the USD value at the time you received it
— If you later sell the SOL you received as royalties, that triggers a separate capital gain or loss based on how the SOL price changed after you received it
— Royalty enforcement is inconsistent on Solana — some markets honor them, some don't. You only owe tax on royalties you actually received.

Keep a log of every royalty payment with the transaction signature, date, amount, and USD value. Your wallet history is the source of truth — don't rely on marketplace dashboards alone, as they can be incomplete.

What About Worthless NFTs? Claiming losses

Bear markets happen. If an NFT you bought is now worth essentially nothing, you may want to claim a capital loss — but there's an important catch.

✓ To claim a capital loss, you must actually dispose of the NFT — selling for 0 SOL, sending to a burn address, or otherwise permanently removing it from your wallet
✓ Selling for a nominal amount (0.0001 SOL) on a marketplace creates a clear paper trail for a loss disposition
✗ Simply holding a worthless NFT in your wallet does NOT trigger a tax-deductible loss — the loss is unrealized until you dispose of it
✗ Don't confuse abandonment with loss. If you abandon a wallet or forget about NFTs, it's not the same as disposing of them for tax purposes
— Capital losses offset capital gains. If you have large gains elsewhere, harvesting NFT losses before year-end can meaningfully reduce your tax bill

Some projects offer official "burn" mechanisms. Sending to Solana's burn address (1nc1nerator11111111111111111111111111111111) is generally accepted as a valid disposal, but keep the transaction signature as proof.

LanaTax tip: LanaTax identifies NFT transactions in your Solana history — mints, purchases, and sales — and labels them in the transaction table. The CSV export includes timestamps and transaction signatures for every event, making it straightforward to calculate your cost basis and holding periods before handing the data to your CPA or tax tool.

Important disclaimer: NFT tax treatment involves interpretation of existing property tax rules applied to novel technology. Rules around worthless assets, royalties, and cross-chain NFTs are not fully settled. This guide reflects widely accepted positions as of early 2026 but is not legal or tax advice. Consult a qualified tax professional, especially if you had significant NFT activity.

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