The IRS plans to tax some NFTs as collectibles — and the rich would pay up to 28% on profits

The IRS intends to tax some non-fungible tokens as collectibles, it said in a notice Monday. Profits carry a higher top tax rate than stocks and crypto.

Investors pay capital gains tax when they sell an asset. The tax is owed on the seller's profit.

NFTs can represent anything, literally anything. The IRS is saying taxation depends on what it represents.Stocks and cryptocurrency carry a maximum rate of 20% for high-income taxpayers. The recent IRS notice supports that notion, indicating that an NFT categorized as a collectible can't be purchased by these retirement accounts without perhaps triggering income taxes and penalties.Cars displayed at a car show in Carmel, California, in 2011.The IRS guidance is "a serious advancement" for taxpayers and tax practitioners, said Lewis, who owns an accounting firm in Draper, Utah.

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