NFT artist restores ‘crypto tax nightmare’ in new song

“The musician of the song “Daily Song” project, his crypto tax laws turned into a warning musical story, his musician Jonathan Mann is Toothless Token (NFT) artist Jonathan Mann.

In a new track shared on X, Mann Narrative How he made $3 million to sell his entire rear catalog as the NFTS, just seeing it disappear when the market crashed during the Terra ecosystem.

“This is a story about how I made three million dollars and lost,” Mann sang. “And how I owe the IRS more money than I have earned in ten years.”

Musicians owe $1.1 million from NFT sales

Mann said it all started on January 1, 2022, when he sold 3,700 songs for $800 a piece, making him about $3 million – all in Ether (Ether) (eth).

Mann and his wife were excited but not ready and decided to stick to cryptocurrency, hoping that the price of ETH would rise. “We have no plans,” Mann admits in the song.

Things changed when ETH’s value dropped in January 2022, and the couple was unsure how much or when to sell it. To exacerbate their troubles, the IRS knocked on the door.

As Mann explains in the song, his income from selling NFTs is taxed as income. This means that taxes are based on the value of the received ETH, regardless of whether the crypto asset’s value collapses later. So even if their $3 million ETH price fell, their tax bills remain the same.

To avoid losing money to sell cryptocurrencies, Mann said they took out a loan with a loan scheme AAVE, using certain ETH as collateral. However, due to the collapse of Terra, the disaster caused as the market began to collapse.

The incident triggered a series of liquidations throughout the ecosystem, including Mann’s loan. In the flash, 300 ETH disappeared. He sighed, “The work of a lifetime has been erased.”

Mann scrambled to find a way out and spent months trading with his accountants to determine how much they owe – they found it was $1,095,171.79.

Related: NFTs can be securities, but SEC Wells notifies OpenSea “not producing” – Lawyer

Rare automatic acquaintance NFT saves a day

With potential lien threatening their homes and the risk of losing their wife’s retirement account, Mann turned to his last option: to sell the rare automatic last name NFT he bought early in cryptocurrency.

The musician said he tried to sell NFTs through X but did not get a good reception. However, he found a broker with a client and he provided $1.1 million to NFT. Mann said he accepted the deal to pay IRS taxes.

Mann does not owe capital gains tax on self-service text sales due to losses caused by AAVE loans. “It’s so painful,” he sang at the end.

Despite the torture, Mann continued to write songs every day and sold them as NFT, still hoping he would make another $3 million one day.