Not all Bored Apes bring wealth and joy. Some of them come with losses.
An interesting situation appeared this Sunday on OpenSea marketplace, where Bored Ape #6464 NFT was sold for 200 USDC or $200. Soon after the same NFT returned to the marketplace, but with a much higher price of 200 ETH ($407.8K).
Bored Apes Yacht Club (BAYC) is one of the most famous and most expensive NFT collections, with the average floor price of each NFT sitting at 101 ETH ($205K) at the time of writing.
Despite that, Bored Ape #6462 ranks as the 209 most rare NFT from the whole 10.000 BAYC collection. It comes with a mix of the rarest BAYC attributes that include pizza, police motorcycle helmet, and bone necklace.
And even last May the same NFT got sold for not less than 2.4 ETH ($7.8K) just a few days after it was minted.
Therefore, the unusually low price for the Ape with such a rare background surprised the crypto community. Some of them came up with the version of a fatal mistake when the seller accepted USDC instead of ETH. Meanwhile, another part of the crypto community suspected that the low-value trade was not accidental and implemented in order to evade taxes.
Tax evasion 101. Both accounts have nothing in their wallets, offers accepted Within 3 mins of listing
— Jonathan (@Jon_Metavest) May 15, 2022
All Bored Ape NFTs are minted on the Ethereum blockchain, which is a public and immutable network and all the transaction history can be seen.
Thus following the Opensea records, it can be seen that Bored Ape #6462 was previously sold 2 times, for 2.14 ETH and 2.4 ETH respectively. Both transactions were made in May 2021. Since then Bored Ape NFT migrated between different NFT wallets, but with no money involved.
However, the last transfer from wallet to wallet appeared on Sunday, May 15. Just seconds after the Bored Ape NFT was received, it got sold for the scandalous 200 USDC. The mysterious buyer registered to the OpenSea just days before the sale happened. The unusual activity of both NFT seller and buyer raised suspicions of tax evasion attempts.
IRS Keen To Collect Taxes From NFTs
In 2021 the NFT market skyrocketed into an extremely trendy market worth $44 billion. Accordingly, the United States Internal Revenue Service (IRS) stated that NFTs might become vehicles for tax evasion and thus settled the rules that every NFT collector has to report their NFT deals for tax reasons.
The tax experts agreed that profit generated from each and every NFT sold on the open market should be considered as ordinary income and taxed for the ordinary income tax rate, which fluctuates between 10% and 37%. The same tax rate applies to both fiat and digital currencies.