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Comment by qbasic_forever | Hacker News Reader

"The collector who dropped $2.9 million on an NFT of Jack Dorsey’s first ever tweet found himself in a bind in April, when he tried to resell the NFT and wound up with a top bid of… $280."

Hahaha, wow. You couldn't even take a 2.899 million dollar write off loss on your taxes too! Just straight vaporizing nearly 3 million bucks.

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The most shocking part for me was that someone was willing to pay $280

The buyer is planning on hodling it until it inevitably rebounds to $2.9 million.

I always figured buying that NFT was sort of a way to just donate to one of Jack's charities. I hope the buyer wasn't trying to make a long term investment with it.

Honest question: why not? I don't really understand the nuance of taxes. I just use a tax app and answer the questions.

In the US, capital losses can offset capital gains to arbitrarily large numbers, but only $3,000 of capital losses can offset ordinary income.

So if you lose $3M in one year and happen to have $3M in other capital gains then hooray - they offset and you pay no taxes on them. But if you lose $3M in one year and made $300k in income, you are still paying income tax on everything minus $3,000.

You get to keep carrying it over so you can apply $3,000 every year - but if you've got losses in the millions they'll never be exhausted in this manner.

But if all of your losses are in crypto coins and not USD it's moot and you can't claim a loss on anything. Not until you convert to cash, and even then I'm not entirely sure it's clear cut.

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