ONLY 5 DAYS UNTIL  
SONG A DAY 6000!!!

Today I'm sharing the story:

HOW I MADE $3 MILLION IN ONE HOUR...  
THEN LOST IT ALL 
AND OWED THE IRS  $1.1 MILLION  I DIDN'T HAVE

Welcome to my Crypto Tax Nightmare.   

Buckle up, it's wild ride. 🧵👇

January 1st, 2022.   
I sold 13 years worth of Song A Day NFTs. 

4,000 songs. 
1,600 collectors.  
ONE HOUR.  
THREE. MILLION. DOLLARS.  

My wife and I sat in her childhood bedroom, staring at the screen. We couldn't speak.  It felt like winning the lottery.  

(Spoiler: It wasn't)

Born and raised in Westford, VT. Hartford now. 

I am in my 16th year of writing a Song A Day.

Here's what's painfully obvious now:   
WE SHOULD HAVE SOLD THE ETH IMMEDIATELY.

We didn't.

One week later, ETH dropped below $3k for the first time in 5 months.  We watched our $3 million start melting away.

We were paralyzed.  
Couldn't bring ourselves to sell. 
Clinging to ETH for dear life.

This was mistake #1.

Quick crypto tax lesson that might save your life:

BUY ETH → Goes up → Sell = 
Capital gains tax  (on the profit)

**EARN** ETH → It's income tax on the 
FULL VALUE when you got it

Doesn't matter if ETH crashes after. You still owe on the original price.  

I earned at $3,754. 
I owed tax on $3,754. 
Even when it hit $1,000.

Plot twist: 2021 had already been insane.

Between @thefuckintrolls and airdrops  (I'm looking at you @ensdomains,  @ConstitutionDAO, @SuperRare, Adventure Loot, etc), we:

- paid $600k in taxes
- STILL OWED $400k more!

ETH was crashing 
Bills were due   
So we made  
mistake #2...

We took out an AAVE loan.

Put up 518 ETH as collateral (worth $1.5M at the time) 

Borrowed $400k to pay taxes

About a week later
Terra Luna imploded.

I paid off the loan at the last second but... 
Our 518 ETH became 163 ETH. 

Worth ~$200k.

$1.3 MILLION.  GONE.

Then came 3 years of hell.  

2022, 2023, 2024: 
Endless Google Meets with my degen accountant. 
Line by line spreadsheets. 
Every extension filed. 
Every option explored.  

Final damage: $1,095,171.79 owed to the IRS.  

We didn't have it.

We hired a tax attorney.  
We stalled.  
We tried EVERYTHING.
But time ran out.

"You have 60 days or we take everything:  
- Your house  
- Your retirement  
- Your NFTs  
- Everything."

I had one option left. One I'd been DREADING...

My Autoglyph 😭

Minted April 8th, 2019.  
(Day before my birthday)  

It cost $36.
And this wasn't just an NFT. 

Matt Hall and John Watkinson (of Cryptopunks fame) had made something special. The day after the mint, I turned mine into music. John built a custom "glyph to midi" tool because of it.

It was a piece of my soul from when 50 people knew what NFTs were.  

By 2024, it was worth over $1 million.

https://x.com/digitallyrare/status/1115377973341884416

After turning down offers that would've been insane in any other context...

The buyer offered exactly what we needed: 
$1,100,000

Because of our capital losses from the AAVE disaster, we could offset the gains.

$36 → $1,100,000   
Capital gain wiped out by capital loss.

We were free.

The moral for every NFT creator:  
SELL. THE. ETH. IMMEDIATELY.  

Now I use 0xSplits to auto-convert 50% to USDC. 

If you learned something from this thread, share it. Someone you know may need to hear it!

Anwyay, that's my crypto tax nightmare.

$3M → $0 → -$1.1M → Selling my soul → Freedom

Tomorrow: Day 3 of the Road to Song A Day 6000.

I'll reveal how I've channeled my trauma and shame into a brand new medium.

That was very painful to read. Ignorance can be very expensive sometimes, but the good thing is that you now know better. I wish you more millions fam. 💪

6000 is mind blowing, that's phenomenal, I'm so sorry that happened man, we need to work on a way to make NFT music not be like this. It's unacceptable that being so successful causes so much strife.