NFT Service Buys ‘Worthless’ Assets

The NFT market has not had the easiest of years. Partially as a by-product of the crypto winter, the value of many assets, including top tokens, has dipped this year, increasing some’s worst fears that the industry would crumble over time. 

But even as some investors have seen the value of their digital assets decline, there seems to be some hope on the horizon. This comes in the form of Unsellable, a company founded by entrepreneurs Skyler Hallgren And Zach Miller. This company essentially lets people claim a tax write-off for their NFTs and avoid taking a loss. 

How Unsellable Works 

One thing to note in this whole situation is that, despite the constant debate, NFTs can be legally seen as an asset. In normal circumstances, shelling out money for an NFT that ends up not returning a profit, is a loss to the individual. But there is a legal loophole in that if an asset is bought and then sold for a loss, it can be used to write off taxes. 

This is essentially Unsellable’s whole business model in that it buys these NFTs from their owners and provides them with proof of purchase. The kicker is that the NFTs are bought for a fraction of their cost and thus, create a big loss for their owners, who can then file that with their taxes. And for anyone who has bought NFTs which did not turn a profit, it is better than taking a massive loss. 

And according to the website, NFTs represent a very unique asset class in that their resale value is often very volatile and when their values crash, they are hard to resell.

“While harvesting our tax losses from stocks in December 2021, we realized that our NFTs presented a problem. While every investment category has its losers, many of the NFTs we invested in were not only big; They were now completely worthless… liquid… unsellable,” a statement on the Unsellable website says. 

As such, it will buy any NFT minted on the Ethereum blockchain for more than a cent and provide proof of purchase. Those with multiple NFTs can sell up to 500 at a time but once they are resold, they cannot be given back. 

“We cannot guarantee that you will be able to buy back your NFTs after you sell, as this will prevent your sale from being counted as a tax deduction. We do this to ensure that your sale was made legitimately as a The right is an ‘arm’s length transaction’, and to avoid any conflict of interest that would come from providing a future economic benefit to the seller,” it notes. 

NFTs and Taxes

As NFT regulations are being better developed around the world, there is the inevitable issue of their taxation. Unsellable has clearly found a demand within the market among NFT holders and while it does not offer tax advice itself, it advises its users to seek the services of a tax expert while using its service.

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