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DeFi Taxes
Updated: Feb 2026 • Educational overview (not tax advice)

DeFi crypto taxes: why bridges, LPs, and staking break reports

DeFi generates “weird” transaction patterns that basic crypto tax software can misread—especially when you bridge chains, add/remove liquidity, or interact with lending markets. Here’s what usually goes wrong and how to prep before filing.

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Why DeFi causes problems

  • Bridges can look like a send with no matching receive (or vice versa).
  • LP tokens can look like swaps/disposals when you add/remove liquidity.
  • Lending markets create tokenized receipts and complex flows.
  • Rewards generate lots of micro-transactions that must be categorized consistently.

DeFi activities that commonly need cleanup

Examples (not exhaustive):

  • Liquidity pools (add/remove liquidity, LP token movements)
  • Yield farming (incentives, staking rewards)
  • Bridging (chain A → chain B)
  • Swaps via routers (aggregators, multi-hop trades)
  • Borrow/lend (receipt tokens, repayments, liquidations)

Prep checklist for DeFi taxes

  • Make wallet inventory complete (every chain + wallet used).
  • Match transfers/bridges so they don’t appear as sells.
  • Fix unknown cost basis before you export reports.
  • Review DeFi categories (LPs/bridges/lending) so results reflect reality.
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Not tax advice. Educational purposes only.

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