From NFT Millions to Crypto Tax Chaos: The Shocking Story of Songwriter Jonathan Mann’s Epic Loss
How one musician’s $3M NFT windfall vanished as Ethereum crashed—and why he faced a massive IRS bill despite the losses.
- $3 million: Earned by Jonathan Mann from NFT sales in 2022
- 3,700 songs: Sold as digital collectibles
- $1.1 million: Tax bill from the IRS, regardless of crypto losses
- 17 years: Length of Mann’s “Song A Day” music project
Jonathan Mann, the creative force behind “Song A Day,” became an NFT trailblazer with a viral success—selling his life’s musical work for a staggering $3 million in Ethereum during the NFT explosion. But as fast as fortune had arrived, disaster struck, exposing a harsh crypto tax reality hitting artists, investors, and collectors everywhere.
Giddy from selling 3,700 unique tracks as NFTs, Mann and his wife clung to their freshly earned ETH, betting big that prices would soar even higher. Instead, the monumental 2022 crypto crash—sparked by catastrophes such as the Ethereum price plummet and the collapse of key projects—wiped out most of their newfound wealth in weeks.
What Happened to Jonathan Mann’s NFT Millions?
Mann’s journey is a wild tale of fortune, risk, and regulatory red tape. He sold his entire back catalog during the NFT bull run, earning millions in ETH. But as history tells it, the price of crypto can swing violently. When Ethereum tumbled, so did the value of Mann’s holdings, even though the IRS still calculated his taxes based on the original sale price—not the much lower value he ended up with.
Despite watching his millions shrink, the IRS sent Mann a tax bill for $1.1 million, unchanged by the losses. In a last-ditch effort to avoid losing everything, Mann took out a loan against his ETH using Aave, a top lending protocol in the decentralized finance world, only to face even more unfortunate liquidations after further crypto market drops.
How Did a Rare NFT Save the Day?
In a real-life plot twist, Mann remembered he owned a rare Autoglyph NFT—a digital collectible from crypto’s early days. With bills looming, he found a buyer willing to pay $1.1 million for it. That single digital artwork rescued him from IRS disaster, allowing him to cover his massive tax debt just in time.
Is the NFT Craze Over, or Just Getting Started?
While NFT activity has dipped compared to the 2022 frenzy, the space remains alive with potential. Mann continues to create and sell new songs as digital collectibles. His advice to creators and investors: learn from his journey—understand the tax rules, act with caution, and never assume crypto prices only go up.
For more on NFTs, blockchains, and the latest trends, visit Coinbase or Coindesk.
FAQ: Crypto Taxes and NFT Risks in 2025
Q: Why did Mann’s tax bill remain high even after losing money?
A: The IRS taxed the NFT sale as income based on the value at time of receipt, not factoring in subsequent price drops.
Q: Can you avoid this kind of tax nightmare?
A: Stay informed! Report NFT earnings, understand tax implications, and consider selling or converting to stablecoins quickly to avoid wild price swings.
Q: Are NFTs still a smart investment?
A: While some rare NFTs hold value, the market is much more cautious now. Do your homework and know the risks before jumping in.
How to Avoid NFT and Crypto Tax Traps
- Track every transaction—document all dates, values, and holdings.
- Consult a crypto-savvy tax professional before selling or HODLing large amounts.
- Diversify your assets—don’t keep everything in volatile crypto.
- Stay alert to changing crypto tax regulations for 2025.
Don’t let crypto dreams turn to nightmares. Here’s your action plan:
- ✅ Record every NFT sale and purchase date/value
- ✅ Take profits when possible, don’t just HODL
- ✅ Set aside funds for potential taxes
- ✅ Check trusted sources like IRS.gov for up-to-date tax guidance
- ✅ Seek professional financial advice before making big moves
Ready to enter the world of NFTs? Stay smart, stay safe, and always follow the music—but keep an eye on the numbers.
