How to do your OpenSea taxes
OpenSea is the largest web3 marketplace for NFTs and other crypto collectibles. The platform lets investors create, buy, sell, and trade NFTs and other crypto assets. With more than $35 billion in trading volume since the platform launched in 2020, Opensea remains one of the most popular platforms for NFT investors and supports multiple blockchains including Ethereum, BNB Chain, Solana, and more. But if you've got transactions on OpenSea, you may have a tax bill! Don't worry, Koinly can help with your OpenSea taxes.
Read next: What is OpenSea?
How are OpenSea NFTs taxed?
Taxes on NFTs may vary depending on where you live in the world, so make sure to read our crypto tax guides for more information in your country, this said, generally speaking, NFTs are viewed as a kind of crypto asset and taxed as such. This means you may pay Capital Gains Tax or Income Tax on your NFTs depending on the transactions you've made:
Buying an NFT: Buying an NFT with fiat currency would be tax free, but in most instances, you'll actually be buying your NFT with crypto - like ETH or SOL. This is generally viewed as a crypto to crypto trade and any gain from disposing of your crypto for your NFT would be subject to Capital Gains Tax.
Trading NFTs: Trading one NFT for another would generally be viewed as a crypto to crypto trade and any gain subject to Capital Gains Tax.
Selling an NFT: Generally speaking, if you've bought an NFT you later go on to sell, you'll pay Capital Gains Tax on any gain as a result of the sale. However, if you're creating and selling NFTs - like an artist with a paintbrush - this could potentially be seen as a kind of additional income and therefore subject to Income Tax instead.
An important note for US investors though - the IRS has just updated their NFT guidance to state that NFTs, where the underlying asset is deemed to be a collectible (including works of art), may be taxed as collectibles. Long-term gains from collectibles are still subject to Capital Gains Tax, but at a higher rate than for other assets.
Got NFT losses? Learn how to use them to reduce your tax bill with NFT tax loss harvesting.
Read next: Learn everything you need to know in our OpenSea NFT guide
Does OpenSea report to the IRS?
It's unlikely OpenSea has reported to the IRS. Users use non-custodial wallets to interact with OpenSea and there's no mandatory KYC on the platform, so there's very little identifying data that OpenSea may be able to share with IRS. However, the OpenSea privacy policy does state the company reserves the right to share user data to remain compliant with relevant authorities, and the new crypto business reporting requirements from the US Infrastructure Bill are imminent, meaning OpenSea may have to report to the IRS in the future.
How to get OpenSea tax documents
Wondering why the platform can't just generate OpenSea tax documents for you? OpenSea tax reporting is complicated.
Crypto taxes - including NFT taxes - are incredibly convoluted. For platforms with millions of users spread across the world, the tax rules vary from country to country. As well as this, OpenSea doesn't have your other crypto transaction records to make calculations with. So for example, if you bought an NFT on OpenSea with Ethereum, OpenSea doesn't know your original ETH purchase price and therefore can't calculate any gains.
That's where Koinly comes in. Koinly makes generating your OpenSea tax documents easy. All you need to do is connect to Koinly and Koinly will calculate your gains, losses, and income for you and generate your OpenSea tax forms. Here's how it works.
How to import OpenSea transactions to Koinly automatically
To import your OpenSea transactions into Koinly so it can calculate your taxes, you'll need to connect each wallet you've used to interact with OpenSea to Koinly.
This is really easy to do, you just need your public address from each wallet - but remember, you’ll need to do this for each wallet you use to interact with OpenSea in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, and more.
You can find steps on how to connect a variety of popular wallets to Koinly on our integration pages, but here’s an example of how it generally works.
In wallet
Open or log in to your wallet
Select the blockchain you’d like to connect to - for example, Ethereum or Binance Smart Chain
Copy your public address
On Koinly
Sign up or log in to your Koinly account and go to the wallets page
Search for and select the blockchain you’d like to connect to - for example, Ethereum or Binance Smart Chain
Give your wallet a name - for example - MetaMask or Trust Wallet
Paste your public address
Select import
Important
If you've bought NFTs on different blockchains using the same wallet, you'll need to get your address for each of these blockchains from the wallet and add all these to Koinly. For example, if you'd bought an NFT on the Ethereum blockchain and an NFT on Binance Chain using your MetaMask wallet, you'd need both your Ethereum address and your Binance Chain address from that wallet and to add these to Koinly in order for it to calculate your taxes correct.
It’s really helpful to name your wallets when you’re adding them to Koinly. This can help you find any transactions you believe have errors later on much more easily!
Your frequently asked questions...
Do you pay taxes on OpenSea?
Yes. Tax offices generally agree NFTs are taxable and you'll need to pay tax on any gains or income you make as a result of your transactions on OpenSea. You can find out more in our NFT taxes guide.
How much do you get taxed for selling an NFT?
This very much depends on where you live and your transactions. For example, in the US, you'll pay up to 37% tax on short-term gains from NFTs and potentially up to 28% tax on long-term gains from NFTs deemed collectibles!
Why can't OpenSea issue tax documents?
There's two main reasons OpenSea is unable to issue users with tax documents. The first is the inability to track cost basis. So if you've bought an NFT with ETH, OpenSea doesn't know the cost basis of your ETH (the original price). It therefore can't calculate your gain or loss as a result and inform you of your tax liability from a transaction. Secondly, crypto taxes are complicated. OpenSea is a global platform, so to successfully support users tax reporting requirements, it would potentially need to generate dozens of different forms for tax offices around the world. However, while OpenSea can't issue tax documents - Koinly can help!
How does OpenSea tax reporting work?
Your exact OpenSea tax reporting requirements depend on where you live and your tax office. But generally speaking, you'll report any gains, losses or income from crypto and NFTs in your annual tax return. You can find out more about NFT reporting requirements in your country in our crypto tax guides.
Is there an OpenSea sales tax?
A select few states have made it clear that you'll need to pay sales tax on NFTs. OpenSea does not calculate or withhold sales tax for users, so the responsibility lies with you to calculate and pay any sales tax due. You can see more about crypto and NFT state taxes in our US tax rates guide.
How to report NFTs on taxes?
The answer to this question all depends on where you live - but generally, you'll pay Capital Gains Tax or Income Tax on NFTs (depending on your transactions) and you'll report this in your annual tax return to your tax office. Learn more in our crypto tax guides.
Is there OpenSea tax software?
Yes - Koinly! Koinly can calculate your OpenSea taxes and generate the tax documents you need to file easily with your tax office. Best of all, Koinly's free to try as OpenSea tax software indefinitely - you'll only ever pay when you want to upgrade to a paid plan to generate your report.
