I’m wondering how to declare taxes with DPI since it is composed of other tokens and I can imagine that a rebalancing of the DPI could be interpreted as a taxable event. Is this even a concern for the tax offices around the world?
Not tax advice
I treat buying DPI as a taxable event, and I treat selling DPI as a taxable event.
I treat whatever the smart contracts underlying DPI do, is none taxable.
The same would apply to Uniswap LP tokens or to a TradFi S&P 500 ETF.
Your tax jurisdiction may differ, but I think I’m ok with this approach.
Not tax advice
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