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In May 2022, Instagram debuted its NFT support program, and shortly after that Meta has done the same with Facebook with selected content creators. Facebook officials have stated that the social media platform allows a selected group of content creators to post-digital collectibles on Facebook only in the US, for the time being.
With this feature, creators will get the freedom to display their NFTs on the profiles below a new tab with a “digital collectibles” title similar to Instagram. But, what does it mean for creators on the NFT taxes front? Let’s find out in this brief piece.
The Launch
This feature was officially launched a week later when Mark Zuckerberg, the CEO of Meta announced that the company would be testing NFT support on the social media platform. During the announcement, Zuckerberg said the testing feature will allow content creators to cross-post on Facebook and Instagram. But, the company spokesperson said that this sharing feature will be rolled out soon.
The product manager at Meta, Navdeep Singh shared a few screenshots of the NFT support. As per the screenshots, users can post NFTs on their timeline, and others can see the details about the NFT such as the information about the creator and the collection when clicked on it.
At the launch, Instagram supported Ethereum and Polygon-based NFTs with Flow and Solana support in progress. Zuckerberg also stated that Meta is working on AR NFTs also known as 3D NFTs, which can be brought to Instagram Stories with the help of Spark AR, the company’s software AR platform.
NFT Taxes
Other than sharing the collectibles on the social media platform, Meta is also working on allowing users to sell NFTs as it seeks to jump on the digital collectible bandwagon.
Tech teams at Instagram and Facebook are working on the feature that will enable users to show their NFTs as well as help them create or mint the NFT tokens. Apart from this, Meta is also working on creating a marketplace for users to sell or buy NFTs.
If Meta is making such strides on the NFT front, how will it affect an NFT buyer or seller? How much NFT taxes do they have to pay?
NFTs are straightforward by nature as it is much easier to identify the units sold. The taxes on NFTs might be classified as capital gains, regular income, or tax-exempt based on what the NFT is. For instance, if you purchase an NFT that represents a real estate asset. Just because the token represents a physical asset, it will be taxed similar to real estate rather than a crypto token. If you, as NFT investors, are buying and selling NFTs in the open market, you will be subjected to taxes as same as crypto trading.
To Conclude
Meta is taking a leap by integrating NFTs on its platform. Meta has also stated that users won’t have to pay any fees for posting or sharing a digital collectible. The company also said that they are aware of the sustainability issues. Meta is working on reducing the emissions that might be related to digital collectibles.
Additionally, this feature might be in the developmental phase, but it will get launched soon and it will affect the NFT marketplace. Also, if NFT investors are using the Meta NFT marketplace to buy and sell digital collectibles, they have to pay NFT taxes on their transactions.
FAQs
- Does Meta have NFTs?
In May 2022, Instagram debuted its NFT support program, and shortly after that Meta has done the same on Facebook with selected content creators. Facebook officials have stated that the social media platform allows a selected group of content creators to post-digital collectibles on Facebook only in the US, for the time being. This feature was officially launched a week after Mark Zuckerberg, the CEO of Meta announced that the company would be testing NFT support on Facebook.
- Are NFTs still relevant?
NFTs saw a surge in 2021, but this growth leveled off in 2022. However, Meta taking a swing at the NFT marketplace by introducing digital collectible support on the social media platform might catapult the NFT market even further.
- Is it easy to sell NFT?
People who create and sell NFTs are usually digital creatives. In simple terms, yes, it is hard to sell NFTs unless you’ve created an audience for yourself. It is easy for digital creatives to create or mint an NFT, but after doing it, they have to find buyers for their NFTs. And it is hard to convince buyers to buy your digital collectible because uploading something on a marketplace or website doesn’t attract buyers.
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