DeFi taxes: map the actions before calculating

Turn the wallet history into an action log

A transaction hash identifies a blockchain event. It does not by itself show the legal ownership, USD basis or full economic action. Decode the protocol action and track which assets left and which assets arrived.

Review each action on its own facts

A trade between materially different assets generally creates a disposal. Liquidity-provider tokens, wrapped assets, bridging and collateral arrangements require analysis of the rights that changed. Do not label all DeFi deposits taxable or all withdrawals tax-free.

A practical reconciliation workflow

Begin with opening balances. Add purchases and income, match self-transfers and review contract interactions. Finish by checking reconstructed quantities against each closing wallet balance.

• Save the transaction receipt and decoded action.
• Record USD valuations and transaction costs.
• Keep reward receipts separate from deposit and withdrawal amounts.
• Document uncertainty in a review column rather than silently picking a category.

Keep exploring