Nfp

Musician Jonathan Mann, renowned for his "Song A Day" project, has transformed a harrowing personal experience with crypto taxes and market volatility into a raw and resonant musical narrative. His latest track vividly recounts how an initial $3 million windfall from NFT sales evaporated, leaving him with a staggering tax bill and a cautionary tale for the burgeoning world of digital assets.
The ordeal began on January 1, 2022, when Mann sold his entire back catalog of 3,700 songs as NFTs, netting approximately $3 million in Ether (ETH). Enthusiastic but unprepared, Mann and his wife decided to hold onto the ETH, hoping for further price appreciation. This decision, as Mann candidly admits in his song, was made "without a plan."
Their optimism soon met a harsh reality. As ETH's value began to decline in January 2022, the couple found themselves in a difficult position, unsure when or how much to sell. The situation was compounded by the unwelcome arrival of the US Internal Revenue Service (IRS).
A crucial lesson learned by Mann, and a critical point for any crypto earner, is that earnings from NFT sales are taxed as income based on the value of the crypto when received. This means that even if the crypto asset subsequently crashes in value, the original tax liability remains. Despite their $3 million in ETH plummeting in price, Mann's tax bill did not adjust.
To avoid selling their depreciating crypto at a loss, Mann opted for a loan through the lending protocol Aave, using some of his ETH as collateral. However, this strategic move quickly spiraled into disaster. The catastrophic collapse of the Terra ecosystem triggered a cascade of liquidations across the crypto market, including Mann's Aave loan. In a moment, 300 ETH — "a lifetime of work" — was wiped out.
Facing dire consequences, including potential liens on their home and the risk of losing his wife's retirement account, Mann spent months meticulously poring over transactions with his accountant. The final, painful tally for his tax obligation was $1,095,171.79.
In a last-ditch effort, Mann turned to a rare Autoglyph NFT he had acquired years prior. After an unsuccessful attempt to sell it on X, he found a broker who connected him with a client offering $1.1 million for the digital artwork. Mann accepted the offer, using the proceeds to finally settle his formidable IRS bill. Due to the significant losses incurred from the Aave loan, he fortunately did not owe capital gains taxes on the Autoglyph sale, a small consolation in a deeply "bittersweet" resolution.
Despite the profound financial and emotional toll, Jonathan Mann remains undeterred. He continues to write and sell daily songs as NFTs, holding onto the hope that he will one day reclaim the $3 million he once earned. His story serves as a stark reminder of the complexities and risks inherent in the rapidly evolving crypto landscape, particularly concerning taxation and market volatility.

#NFP #NFPDEAD
Follow Me For More Information 😊