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As 2025 unfolds, the landscape of Decentralized Finance (DeFi) taxation for U.S. individuals continues to evolve. While the IRS has historically tread cautiously in providing specific DeFi guidance, recent legislative actions and intensified enforcement underscore the critical need for meticulous reporting. This year brings significant changes, most notably the repeal of the DeFi Broker Rule, yet it emphatically does not relieve taxpayers of their reporting obligations. Understanding these shifts is paramount to staying compliant and avoiding potential penalties. This guide breaks down the essential aspects of reporting your DeFi income and gains accurately in 2025.
Navigating the Evolving DeFi Tax Landscape
The tax treatment of Decentralized Finance (DeFi) activities has been a persistent challenge for crypto enthusiasts and regulators alike. In 2025, a notable development was the Congressional repeal of the DeFi Broker Rule in April. This ruling effectively nullified Treasury regulations that would have mandated certain DeFi participants to act as brokers, requiring them to issue Form 1099-DA for their transactions. Proponents of the repeal argued that the original rule was impractical for the inherently decentralized nature of DeFi, potentially stifling innovation. However, it's crucial to emphasize that this legislative change does not absolve taxpayers of their responsibility to accurately report all DeFi-related income and capital gains or losses. The IRS continues to view digital assets as property, not currency, a foundational principle that guides all reporting requirements. Meanwhile, centralized exchanges are now preparing to issue Form 1099-DA for the 2025 tax year starting in early 2026, highlighting a bifurcated approach to reporting by the IRS, with greater compliance burdens expected from centralized entities.
The IRS's persistent focus on digital assets means that every transaction, regardless of its complexity, needs careful consideration. The shift from treating crypto as a novel asset to integrating it into established tax frameworks is well underway. This increased scrutiny, coupled with the sophistication of IRS audit systems, particularly those leveraging AI, means that any oversight or underreporting can lead to significant consequences. Staying informed about these regulatory shifts and understanding the implications for your specific DeFi activities is no longer optional but a necessity for any U.S. taxpayer involved in this space. The digital asset space is dynamic, and so are the rules governing it.
The repeal of the DeFi Broker Rule means that the onus of tracking and reporting falls squarely on the individual user. This requires a proactive approach to record-keeping and a thorough understanding of tax principles as they apply to unique DeFi mechanisms. It's a complex web, but with the right knowledge and tools, navigating it successfully is achievable. The IRS's stance remains firm: all gains from digital asset activities are taxable. The challenge lies in correctly identifying the nature of the income and applying the appropriate tax treatment.
The government's increasing attention to the digital asset sector signals a maturing regulatory environment. While the specific guidance for DeFi may still be catching up to the pace of innovation, the general principles of taxation for property and income are being rigorously applied. This means that activities like yield farming, staking, and lending, which generate new tokens or rewards, are viewed as income-earning events, distinct from the disposition of an asset, which triggers capital gains or losses. The distinction is critical for correct tax reporting.
Key Takeaways on the Evolving Landscape
| Development | Implication for Taxpayers | Action Required |
|---|---|---|
| Repeal of DeFi Broker Rule | Individual responsibility for reporting remains paramount; no automatic 1099-DA from DeFi protocols. | Meticulous personal record-keeping is essential. |
| Centralized Exchange Reporting (2026 for 2025 tax year) | Increased transparency for CEX transactions; potential for IRS cross-referencing. | Ensure your personal records align with 1099-DA received from CEXs. |
| Digital Assets as Property | All transactions are subject to capital gains/losses or ordinary income rules. | Accurately track basis and fair market value for all transactions. |
Understanding Taxable DeFi Events
DeFi is not a single activity but a spectrum of financial interactions, each carrying potential tax implications. At its core, the IRS views most DeFi actions as taxable events. This includes a wide array of activities such as yield farming, participating in lending protocols, providing liquidity to decentralized exchanges, staking your assets to secure networks, executing token swaps, and receiving airdrops. Each of these can trigger tax obligations, either as ordinary income or capital gains/losses, depending on the specific circumstances. For instance, receiving rewards from yield farming or interest from lending is generally considered ordinary income at the time of receipt, valued at its fair market value. On the other hand, selling a token, trading one crypto for another, or using crypto to purchase goods or services are typically capital gain or loss events.
The complexities extend to more nuanced DeFi strategies. Taking out a loan in a DeFi protocol, for example, is usually not a taxable event in itself. However, the repayment of that loan can be, particularly if there's a change in the value of the underlying asset or the repayment mechanism involves the disposal of another asset. Similarly, lending assets to a margin trading platform doesn't immediately trigger taxes, but any profit realized from those operations, or the use of those assets for payment, certainly does. This highlights the IRS's focus on the economic realization of gains.
Airdrops, a common reward mechanism in DeFi, are treated as ordinary income upon receipt, based on their fair market value at that precise moment. This applies to both the received tokens and any associated "points" that are later convertible into tokens, with the tax event occurring when the airdrop is actualized. Governance tokens, which grant voting rights in decentralized protocols, also fall under this umbrella, typically taxed as ordinary income upon receipt. The act of providing liquidity to pools can also be a taxable moment, potentially involving capital gains or losses when assets are deposited or withdrawn, depending on how the specific protocol structures these operations. Even seemingly simple actions like bridging tokens between different blockchains can sometimes be a taxable event, particularly when tokens are "wrapped," which may involve an exchange that triggers capital gains.
Let's consider some practical examples. If you participate in yield farming by depositing stablecoins into a protocol and earn new governance tokens as rewards, those tokens are taxed as ordinary income at their fair market value when you receive them. If you later sell these earned tokens for a profit, you'll then owe capital gains tax on that profit. Similarly, earning interest by lending your ETH on a platform like Aave or Compound means you recognize ordinary income equal to the value of the interest received. Swapping Bitcoin for Ethereum on a decentralized exchange (DEX) like Uniswap is a crypto-to-crypto trade, triggering a capital gains or loss event based on the difference between the cost basis of the Bitcoin you traded and the fair market value of the Ethereum you received.
Taxable vs. Non-Taxable DeFi Actions (2025)
| DeFi Activity | Tax Treatment | When Taxable |
|---|---|---|
| Receiving Staking Rewards/Yield Farming Rewards | Ordinary Income | Upon receipt (FMV) |
| Receiving Airdrops | Ordinary Income | Upon receipt (FMV) |
| Token Swaps (Crypto-to-Crypto) | Capital Gains/Losses | Upon disposal of asset |
| Using Crypto for Purchases | Capital Gains/Losses | Upon disposal of asset |
| Taking a DeFi Loan | Generally Not Taxable | N/A (Repayment may be taxable) |
| Providing Liquidity (Deposit) | Potentially Capital Gains/Losses | Upon deposit, depending on protocol |
My opinion: The IRS's approach to DeFi taxation is an ongoing dance between innovation and regulation. While the repeal of the broker rule offers some relief from immediate reporting burdens for DeFi participants, it significantly increases the personal responsibility for accurate accounting. It's vital to remain vigilant and understand that 'decentralized' does not mean 'untaxed.' The IRS is actively developing its methods to track these transactions, making proactive compliance the smartest strategy.
The Nuances of Income vs. Capital Gains
Distinguishing between ordinary income and capital gains is fundamental to correctly reporting your DeFi activities. The IRS treats digital assets as property, and the tax implications stem from how you acquire, hold, and dispose of that property. Ordinary income arises when you receive something of value in exchange for your labor, services, or the use of your assets. In DeFi, this often manifests as rewards, interest, or fees earned through active participation. For instance, staking your cryptocurrency to earn network rewards generates ordinary income. The value of these rewards is assessed at their fair market value (FMV) on the date you receive them. Similarly, earning interest from lending your digital assets on a DeFi platform is treated as ordinary income, with the taxable amount being the FMV of the interest at the time it's credited to your account. Yield farming rewards and airdrops also typically fall into this category.
Capital gains or losses, on the other hand, are realized when you dispose of a capital asset. In the context of DeFi, this means selling a cryptocurrency, trading one digital asset for another, or using crypto to purchase goods and services. The gain or loss is calculated as the difference between the asset's cost basis (what you originally paid for it, including transaction fees) and its FMV at the time of disposition. If you held the asset for one year or less, any gain is considered short-term capital gain, taxed at your ordinary income tax rate. If you held it for more than one year, it's a long-term capital gain, which is typically taxed at lower, more favorable rates. Losses can generally be used to offset capital gains, and up to $3,000 ($1,500 if married filing separately) of net capital losses can be deducted against ordinary income each year, with any excess carried forward to future tax years.
The distinction is crucial for tax planning. For example, if you receive a DeFi token as a reward, its FMV at receipt is ordinary income. If you then hold that token for over a year and later sell it for a profit, that profit is a long-term capital gain. This means the same underlying asset can generate both ordinary income and capital gains at different points in its lifecycle. Understanding this dual nature is key to accurate reporting. The IRS requires you to maintain records that clearly delineate these events and their respective tax treatments.
Consider the example of receiving governance tokens from a decentralized exchange after providing liquidity. The fair market value of those tokens when you receive them is ordinary income. If you subsequently swap those governance tokens for another cryptocurrency, like Ether, you'll realize a capital gain or loss on the governance tokens. The basis for calculating this capital gain or loss will be the FMV you already recognized as ordinary income. This can be a complex calculation, underscoring the need for robust tracking tools. The IRS's position is clear: income is income, and capital gains are capital gains, and both must be reported.
Income vs. Capital Gains: A DeFi Comparison
| DeFi Activity | Tax Classification | Basis for Calculation | Tax Rate |
|---|---|---|---|
| Staking Rewards | Ordinary Income | FMV at receipt | Ordinary Income Rates |
| Lending Interest | Ordinary Income | FMV at receipt | Ordinary Income Rates |
| Selling Crypto | Capital Gains/Losses | (Selling Price - Cost Basis) | Short-term (Ordinary) or Long-term (Preferential) |
| Trading Crypto for Crypto | Capital Gains/Losses | (FMV of Received Crypto - Cost Basis of Sent Crypto) | Short-term (Ordinary) or Long-term (Preferential) |
My opinion: The IRS's persistent categorization of digital assets as property, rather than currency, is the bedrock upon which all DeFi tax reporting rests. Understanding the fundamental difference between earning new value (ordinary income) and disposing of existing value (capital gains/losses) is paramount. This distinction directly impacts your tax liability, making it essential to meticulously track each type of transaction to ensure accurate filing and avoid any inadvertent misrepresentation to the tax authorities.
Record-Keeping and Cost Basis in DeFi
Accurate record-keeping is the cornerstone of compliant DeFi tax reporting, especially with the IRS's increasing focus on per-wallet cost basis tracking. Gone are the days when a general understanding of your holdings was sufficient. Now, the IRS expects granular detail for each transaction, originating from each wallet you utilize. This means meticulously documenting the acquisition date, cost basis, and fair market value for every digital asset received or disposed of. The cost basis is critical for calculating capital gains and losses; without it, you cannot accurately determine your profit or loss upon selling or trading an asset.
The challenge in DeFi lies in the sheer volume and complexity of transactions. Wallets can interact with numerous protocols, executing multiple trades, earning rewards, and receiving airdrops in rapid succession. Each of these actions requires a distinct record. For instance, if you deposit ETH into a liquidity pool and later withdraw it, and during that period, the ETH accrued fees, you need to track the basis of the original ETH, the value of the fees earned (which is ordinary income), and potentially any change in the value of the pooled assets. The IRS's shift towards per-wallet tracking emphasizes the need to associate every transaction with the specific wallet it occurred in. This prevents commingling of assets and ensures that the cost basis is correctly applied to each individual holding.
The fair market value (FMV) is essential for reporting ordinary income and for establishing the cost basis of newly acquired assets. For example, when you receive staking rewards, you must determine their FMV in USD on the day you receive them. This FMV becomes both your ordinary income and the cost basis for those newly acquired tokens. If you later sell these tokens, you'll calculate the capital gain or loss based on this initial basis. The same principle applies to airdrops and other reward mechanisms. The challenge here is the volatile nature of cryptocurrency prices, meaning FMV can fluctuate significantly even within a single day.
To manage this intricate data requirement, robust record-keeping systems are indispensable. Relying solely on manual spreadsheets can become unmanageable very quickly for active DeFi users. This is where specialized crypto tax software becomes invaluable. These tools are designed to automatically import transaction data from various exchanges and wallets, calculate cost basis using different accounting methods (like FIFO or LIFO, though the IRS generally favors specific identification or FIFO for crypto), and generate the necessary tax forms, such as Form 8949 for capital gains and Schedule 1 for ordinary income. The ability to track by wallet is a feature becoming increasingly important in these software solutions.
Record-Keeping Essentials for DeFi in 2025
| Data Point | Why It's Crucial | How to Track |
|---|---|---|
| Transaction Date & Time | Determines tax year and basis valuation | Wallets, explorers, tax software |
| Asset Type (Token) | Necessary for identifying the specific asset | Wallets, blockchain explorers |
| Quantity Transacted | Calculates gains/losses and basis | Wallets, exchanges, tax software |
| Cost Basis | Foundation for capital gains/losses | Tax software, careful manual tracking |
| Fair Market Value (FMV) | Determines ordinary income and basis for new assets | Reliable price aggregators, tax software |
| Wallet Address | IRS focus on per-wallet basis tracking | All transaction logs |
My opinion: The IRS's emphasis on per-wallet cost basis tracking is a significant development that demands a higher level of diligence from DeFi users. Simply tracking total holdings is no longer sufficient. Individuals must understand how to associate specific transactions with individual wallets to accurately calculate their tax obligations. Investing in robust tracking tools or developing a meticulous manual system is no longer a suggestion but a prerequisite for compliant DeFi participation.
Leveraging Tools for Compliance
Given the escalating complexity of DeFi tax reporting and the IRS's increasing scrutiny, leveraging specialized tools has become essential for maintaining compliance. The sheer volume of transactions, the variety of protocols, and the constant evolution of DeFi strategies create a challenging environment for manual tracking. This is where cryptocurrency tax software solutions shine. Platforms like CoinLedger, Koinly, and CryptoTaxCalculator are specifically designed to aggregate transaction data from your various wallets and exchanges, process this information, and generate the necessary tax forms required by the IRS.
These platforms typically offer features such as automatic transaction import via API connections or CSV file uploads, robust cost basis calculation methods, and the ability to track gains and losses across different asset types. Many of them also provide detailed reports that break down ordinary income from staking, lending, and airdrops, alongside capital gains and losses from trading and selling. The ability of these tools to handle the intricacies of DeFi transactions, including complex yield farming setups, liquidity pool interactions, and even some cross-chain bridging activities, significantly reduces the burden on the individual taxpayer. They also help ensure that crucial details like the fair market value at the time of receipt and disposal are accurately captured.
Beyond tax software, understanding and utilizing blockchain explorers can also be beneficial for auditing your transactions. Tools like Etherscan, BscScan, or PolygonScan allow you to view the raw transaction data on the respective blockchains. While they don't inherently calculate taxes, they serve as an invaluable double-check mechanism to verify the accuracy of the data imported by your tax software or recorded in your own logs. This transparency is a double-edged sword for taxpayers; it provides data for reporting but also allows the IRS to potentially track activities.
For those engaging in sophisticated DeFi strategies or facing particularly complex tax situations, consulting with a qualified tax professional who specializes in cryptocurrency is highly recommended. An experienced crypto tax advisor can provide personalized guidance, help interpret the latest IRS rulings as they apply to your unique circumstances, and ensure that your tax filings are accurate and defensible. They can also assist in identifying any missed deductions or tax-saving opportunities. The combination of user-friendly tax software and expert human advice offers the most comprehensive approach to navigating the intricate DeFi tax landscape in 2025.
Recommended Tools for DeFi Tax Compliance
| Tool Category | Examples | Key Benefits |
|---|---|---|
| Crypto Tax Software | CoinLedger, Koinly, CryptoTaxCalculator | Automated import, gain/loss calculation, form generation, transaction history |
| Blockchain Explorers | Etherscan, BscScan, PolygonScan | Transaction verification, public ledger access |
| Tax Professionals | Specialized crypto CPAs/EAs | Personalized advice, complex situation resolution, audit support |
My opinion: The IRS is making it clear that transparency and detailed record-keeping are non-negotiable. While the repeal of the DeFi broker rule might seem like a reprieve, it fundamentally shifts the burden of compliance onto the individual. Embracing technology, particularly specialized crypto tax software, is no longer a luxury but a necessity for anyone seriously involved in DeFi. It streamlines the process, minimizes errors, and provides a robust defense in case of an audit.
Frequently Asked Questions (FAQ)
Q1. Does the repeal of the DeFi Broker Rule mean I don't have to report DeFi income?
A1. Absolutely not. The repeal means that DeFi protocols or participants are generally not required to issue 1099-DA forms. However, you, as the taxpayer, are still legally obligated to report all your DeFi income and capital gains/losses to the IRS.
Q2. How do I determine the cost basis for tokens I received through yield farming?
A2. The fair market value (FMV) of the yield farming rewards in USD on the date you receive them is considered ordinary income. This FMV also becomes your cost basis for those newly acquired tokens. When you later sell or trade these tokens, you'll calculate capital gains or losses based on this basis.
Q3. Is receiving an airdrop a taxable event in 2025?
A3. Yes, receiving an airdrop is generally considered ordinary income. You must report the fair market value of the airdropped tokens at the time of receipt as income.
Q4. What is the tax treatment of providing liquidity to a DeFi protocol?
A4. Providing liquidity can be complex. While depositing assets might not always be a taxable event, withdrawing them or receiving trading fees can be. Fees earned are typically ordinary income. Any profit or loss from the change in value of the deposited assets when you withdraw them is usually treated as a capital gain or loss.
Q5. Does the IRS track DeFi transactions directly?
A5. The IRS has sophisticated data analysis tools, including AI, that can identify undeclared cryptocurrency transactions. While they may not directly "track" every DeFi transaction in real-time like a centralized exchange, they can cross-reference data from various sources and flag discrepancies in tax filings.
Q6. What forms do I need to report DeFi income and gains?
A6. Ordinary income from DeFi activities is typically reported on Schedule 1 (Form 1040), line 8. Capital gains and losses are reported on Form 8949 and summarized on Schedule D (Form 1040).
Q7. How should I handle Wrapped Tokens (e.g., wBTC, wETH)?
A7. Wrapping a token can sometimes be considered a taxable event if it involves an exchange of one asset for another, similar to a trade. The IRS guidance on this can be nuanced, so it's best to treat it as a potential capital gains event and track the FMV of the wrapped token at the time of creation.
Q8. What if I used DeFi in multiple wallets?
A8. You need to track and report transactions for each wallet separately, especially concerning cost basis. The IRS is increasingly focusing on per-wallet cost basis tracking, so maintaining distinct records for each wallet is crucial for accurate reporting.
Q9. Are staking rewards taxed as ordinary income even if I reinvest them?
A9. Yes. The moment you receive staking rewards, they are taxable as ordinary income based on their FMV. If you immediately reinvest those rewards, that reinvestment establishes the cost basis for the newly acquired tokens. The initial receipt is the taxable event.
Q10. What is the "per-wallet cost basis tracking" the IRS is emphasizing?
A10. It means the IRS wants you to track the cost basis of your assets for each individual wallet. This prevents a situation where, for example, gains in one wallet could be offset by losses in another without proper documentation showing the specific assets and their acquisition costs in each wallet.
Q11. If I borrow crypto from a DeFi protocol, is that income?
A11. No, simply borrowing crypto is generally not considered income. It's akin to taking out a loan in traditional finance. The taxable event occurs when you repay the loan, especially if you use another asset to repay it, or if you profit from the borrowed funds in a way that constitutes a taxable disposition.
Q12. What happens if I use crypto to buy NFTs or other digital assets?
A12. Using cryptocurrency to purchase another digital asset, like an NFT, is treated as a disposition of the cryptocurrency. You will realize a capital gain or loss on the crypto used for the purchase, calculated as the difference between its cost basis and its FMV at the time of purchase.
Q13. Are "points" earned in DeFi protocols taxable?
A13. Generally, the "points" themselves are not taxable until they are converted into a cryptocurrency or token that has ascertainable value. The taxable event occurs when you receive the tokenized airdrop or reward based on those points.
Q14. How does DeFi lending affect my taxes?
A14. The interest you earn from lending your crypto is taxed as ordinary income at its FMV when received. The principal amount you lent is not taxed until you withdraw it, assuming no capital gains or losses occurred during the lending period.
Q15. What if I used a DeFi protocol that later got exploited? Do I get a tax deduction for losses?
A15. Generally, losses from protocol exploits are treated as capital losses. You can use these losses to offset capital gains. If your capital losses exceed your capital gains, you may be able to deduct a limited amount against ordinary income, with any excess carried forward.
Q16. Is there any way to reduce my DeFi tax liability?
A16. Strategies include holding assets for over a year to qualify for long-term capital gains rates, tax-loss harvesting (selling assets at a loss to offset gains), and potentially exploring tax-advantaged accounts if regulations permit in the future. Careful planning and record-keeping are key.
Q17. What is the significance of the IRS treating digital assets as property?
A17. It means that standard tax principles for property apply. Disposal of property triggers capital gains or losses, while income generated from property (like rent or interest) is treated as ordinary income. This framework is fundamental to how DeFi transactions are taxed.
Q18. How do I report a crypto-to-crypto swap?
A18. A swap of one cryptocurrency for another is a taxable event. You must calculate the capital gain or loss by comparing the fair market value of the cryptocurrency you received to the cost basis of the cryptocurrency you sent. This is reported on Form 8949.
Q19. Can I use my DeFi trading history to claim business expenses?
A19. If your DeFi activities rise to the level of a trade or business (significant, continuous, and regular activity with profit motive), you might be able to deduct business expenses on Schedule C. However, simply trading for investment purposes does not qualify.
Q20. What should I do if I've made mistakes in past DeFi tax filings?
A20. You can file an amended tax return using Form 1040-X to correct prior year filings. It's advisable to consult with a tax professional to ensure the amendment is handled correctly and to understand potential penalties or interest.
Q21. Is DeFi considered a security by the IRS or SEC for tax purposes?
A21. While the SEC has taken a strong stance on certain tokens being securities, the IRS primarily treats digital assets as property for tax purposes. The tax implications focus on the property aspect, regardless of whether a token might also be classified as a security by other agencies.
Q22. How do I value tokens received on obscure DeFi platforms with no clear USD price?
A22. You need to find the most reliable FMV at the time of receipt. This might involve using historical data from cryptocurrency data aggregators, looking at prices on decentralized exchanges where the token was traded, or consulting with a tax professional for guidance on valuation methods.
Q23. What is the role of tax software in tracking per-wallet cost basis?
A23. Reputable tax software can import transaction data from multiple wallets, identify them, and calculate the cost basis for assets within each wallet, supporting the IRS's requirement for per-wallet tracking. They help aggregate and present this data clearly.
Q24. Are there any safe harbor rules for DeFi transactions?
A24. Currently, there are no specific "safe harbor" rules for DeFi transactions that simplify reporting or reduce liability in the way some traditional financial instruments might have. Diligent and accurate reporting remains the primary compliance strategy.
Q25. What is considered "disposition" of a digital asset for tax purposes?
A25. Disposition includes selling, trading for another cryptocurrency, using it to purchase goods or services, donating it, or even exchanging it for a different type of digital asset. Essentially, any event where you give up ownership or control.
Q26. How often should I update my DeFi tax records?
A26. It's best to update your records as frequently as possible, ideally in real-time or at least weekly. This prevents data loss and makes the annual tax filing process much more manageable and accurate.
Q27. What are the potential penalties for not reporting DeFi income?
A27. Penalties can include fines, interest on underpaid taxes, and in cases of willful evasion, criminal charges. The IRS is actively pursuing non-compliance in the crypto space.
Q28. Can I claim a loss if a DeFi protocol fails or goes bankrupt?
A28. Yes, if your assets are lost due to the failure or bankruptcy of a DeFi protocol, this typically results in a capital loss. You can use this loss to offset capital gains, subject to the usual limitations.
Q29. What is the difference between crypto-to-crypto trades and using crypto for purchases?
A29. Both are generally treated as dispositions triggering capital gains or losses. The primary difference is the nature of what you receive: in a crypto-to-crypto trade, you receive another digital asset; in a purchase, you receive goods or services. The calculation of gain/loss is similar.
Q30. How can I ensure my DeFi tax reporting is compliant with the IRS in 2025?
A30. Maintain meticulous records for all transactions across all wallets, understand the difference between ordinary income and capital gains, utilize crypto tax software, and consult with a qualified crypto tax professional for personalized guidance.
Disclaimer
This article is written for general informational purposes only and does not constitute tax advice. Tax laws are complex and subject to change. Consult with a qualified tax professional for advice tailored to your specific situation.
Summary
Navigating DeFi taxes in 2025 requires diligent record-keeping and a thorough understanding of tax principles. The repeal of the DeFi Broker Rule places the reporting burden squarely on the individual. Key aspects include correctly identifying taxable events, distinguishing between ordinary income and capital gains, and meticulously tracking cost basis per wallet. Utilizing crypto tax software and consulting with tax professionals are crucial for ensuring compliance with evolving IRS regulations.
📌 Editorial & Verification Information
Author: Smart Insight Research Team
Reviewer: Davit Cho
Editorial Supervisor: SmartFinanceProHub Editorial Board
Verification: Official documents & verified public web sources
Publication Date: Nov 20, 2025 | Last Updated: Nov 20, 2025
Ads & Sponsorship: None
Contact: mr.clickholic@gmail.com
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