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What Is This Worth, Exactly? Determining Fair Market Value of Non-fungible Tokens for Charitable Schedule A Deductions
Value is in the eye of the beholder; or was that beauty? This is especially true for those infamous monkey portraits on the internet. Non-fungible tokens (NFTs) have exploded in popularity and can carry with them substantial tax consequences. Due to the volatile nature of the digital asset market and coupled with the lack of similar assets, it can be exceptionally difficult to determine the fair market value (FMV) of NFTs. Gift giving and donations can become much more complicated when NFTs are involved. New Fangled Technology For the noobs, an NFT is a type of cryptographic token that exists on a blockchain. As the name suggests, the tokens are not fungible, meaning each asset is unique and can't be interchanged for one another, the way that dollars or bitcoins can. Every NFT represents a unique asset with a unique value, however, determining what that value is can be quite difficult; The market for buying and selling NFTs can be extremely volatile. Some NFTs may quickly lose value or have no value at all. When a taxpayer donates an NFT to a qualified charitable organization as a way to reduce tax, the FMV is a required piece of information. To find out how to do this properly, keep reading.
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CURRENT EDITION
What Do You Ask Indie Game Developers at Tax Interviews?
When you take on a new client, the tax interview is one of the most crucial elements of ensuring that their tax documents are prepared correctly. Both individual and business clients should provide you with a road map for their current tax situation, what they expect it to look like in the near future, and how your tax planning and preparation skills will help them with their business or financial goals. To focus specifically on business clients, questionnaires that the client fills out beforehand can efficiently cut down on facetime. This allows you more time to ask focused questions and learn about your client’s business needs and environment. But if your client is a game developer, specifically an indie game developer, there’s some nuanced questions you should ask in person or as an addendum to your questionnaire after you’ve read about the basics of doing business with game developers.
Using AI In Your Tax Practice? Choose The Nuclear Option
I always know when something, especially something bad, is trending on social media. Why? Because I’m not on social media and I still hear about the issue. Lately, I’m getting disturbing reports of the cavalier attitude that many tax practitioners are taking towards the use of AI in their practices. Apparently even the IRS is catching on because in late June 2026 the Office of Professional Responsibility (OPR) sent a bulletin to practitioners reminding them of their obligations under Treasury Circular 230 and how the circular’s provisions apply to using AI in a tax practice. The bulletin includes a decent list of best practices, and I recommend reviewing the bulletin and the applicable sections of Circular 230 after you finish this article.
Help Your Clients Implement a Fortune 500 CFO Strategy
For decades, some of America’s largest corporations have used a financial strategy that gives their CFOs greater control over insurance costs, helps them finance risks the commercial market handles poorly and creates an opportunity to retain underwriting profit when losses come in below expectations. Approximately 90% of Fortune 500 companies have captive insurance subsidiaries.¹ Historically, the economics favored organizations with substantial capital, large insurance programs and the resources to support their own insurance operations. Small and midsize businesses rarely had the scale to justify the cost and complexity. That equation has changed. A mature network of specialized insurance professionals and structures now allows qualifying privately held businesses to pursue many of the same risk-financing advantages. Federal tax law can further improve the economics for certain smaller insurance companies. For CPAs and tax professionals, this creates an advisory opportunity. The challenge is recognizing which clients could benefit and what conditions must exist before recommending it.
SIMPLIFIED TAX STRATEGIES &
PRACTICAL IMPLEMENTATION
Think Outside the Tax Box provides tax reduction strategies along with practical
implementation advice in order to reduce your clients’ federal tax bill with ease.
