How to Salvage “Worthless” NFTs and Save on Taxes
According to DappRadar Head of Research Pedro Herrera, the majority of NFT collections will never regain their pre-bear market valuations. So, if you’re wondering what to do with your “worthless” JPEGs, one potential solution is to use them to save on taxes.
Unsellable: Buying Illiquid NFTs for Tax Write-Offs
Unsellable is a startup that buys illiquid NFTs from owners for a penny each, allowing them to declare tax write-offs. The company claims it has already helped customers declare $4.2 million in realized losses. Skyler Hallgren, Unsellable’s co-founder, believes there are potentially billions of dollars in unrealized losses from the NFT bubble of 2021.
Writing Off Losses and Curating a Graveyard
Unsellable’s average user has been able to write off $4,200 worth of NFT losses. However, the company does not touch “blue chip” collections like Bored Ape Yacht Club or CryptoPunks. Instead, it curates a collection of broken NFT toys and abandoned projects.
The Vision and Future Plans of Unsellable
Unsellable aims to become the world’s largest collection of NFTs over time. The company charges a modest fee for each NFT transfer and has managed to flip about 300 acquired NFTs. However, its founders emphasize that sporadic flipping is not the main goal. They envision selling the platform to a crypto tax firm or software company in the future.
The Fate of Unsellable’s Collection
While some parties have shown interest in purchasing Unsellable’s collection, others see it as a museum piece that represents the speculative excesses of the NFT market’s peak. Only time will tell if any of the dead or dying JPEGs in the collection will regain value.
Hot Take: Salvaging NFTs and the Tax Advantage
The brutal bear market has left many NFT collections virtually worthless. However, Unsellable offers a unique solution by buying illiquid NFTs for a penny each, allowing owners to declare tax write-offs. This approach not only helps individuals recover some of their losses but also potentially saves on taxes. While it remains to be seen if this strategy will pay off in the long run, it provides an interesting option for NFT holders stuck with depreciated assets.
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