Untangling DeFi: Crypto Tax Implications For Yield Farmers
Navigating the world of cryptocurrency can be exciting and potentially rewarding, but understanding the tax implications is crucial. Cryptocurrencies like Bitcoin, Ethereum, and others are generally treated as property by tax authorities worldwide, meaning their sale, trade, or even use to purchase goods and services can trigger taxable events. Ignoring these tax rules can lead to penalties and interest, so let's dive into the key aspects of crypto tax.
What is Crypto Tax?
Understanding the basics of crypto tax is the first step to ensuring compliance. It's not as daunting as it seems once you grasp the fundamentals.
Cryptocurrency as Property
Most tax authorities, including the IRS in the United States and HMRC in the UK, classify cryptocurrencies as property rather than currency. This cl...