I'm dealing with a situation and need some guidance.
DeFi yield farming tax treatment. I've been dealing with this for about 11 weeks now and the situation isn't improving.
I have already consulted briefly with a lawyer but got conflicting advice.
Has anyone been through something similar? What worked for you?
Honestly? I'd get a consult. Changed my whole perspective when I did.
This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.
I work in this industry and unfortunately this is very common. The good news is that when people actually push back with legal representation, companies usually settle.
Short answer: not soon. The IRS has been slowly expanding crypto guidance but DeFi-specific rules are still largely absent. What we know: (1) providing liquidity that involves token swaps is likely a taxable event, (2) LP tokens received may be taxable at FMV, (3) impermanent loss is NOT currently deductible as a realized loss (you'd need to remove liquidity to realize), (4) governance token rewards are income at FMV when received. The Infrastructure Investment and Jobs Act reporting requirements (effective 2025) are still being implemented and DeFi 'brokers' are fighting the definition. For now: use a crypto tax tool (Koinly, CoinTracker, TokenTax), track every transaction, and work with a CPA who specializes in crypto. The cost of professional tax prep is a deductible business expense if you're trading as a business.