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Stani@stani·Jul 23

Whats the most boggling tax issues you've encountered with DeFi? Is there something that DeFi protoocls do "wrong" in terms of fitting into the traditional accounting and tax environement? Curious to hear takes across different regions.

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    Cesare@cesare·Jul 23

    In this year Italy formalized a more modern approach to tax crypto activities (previously we were using laws that predated the use of EURO as national currency).

    One of the parameter that makes a swap a taxable event is when the swap is between tokens with different purpose.

    - payment tokens

    - utility tokens

    - security tokens

    With some interesting grey areas on algorithmic stable-coins.

    Basically tokens that don't have a clear purpose within this law framework, opens it up to interpretations, which is not the ideal scenario IMO.

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      Wailoaloa / Jack@wailoaloa·Jul 23

      Biggest headache in crypto in general will always be that each trade or swap is a taxable event, and paper gains can result in huge tax burdens if you didn't realize losses. 2018 taught me that lesson hah.

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        Brother zkJΞw🐺🔊@zkjew·Jul 23

        A lot of DeFi project ls mint and redistribute tokens creating an immediate income tax in a lot of jurisdictions instead of just burning the tokens.

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          Brian J. Sanlon@larryscruff·Jul 23

          Giving an NFT when lending. Just lending is tax free in the UK, but if you're receiving an NFT when lending then it counts as a trade instead. So you get taxed 😔

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