Curve Tax Reporting
TokenTax connects to Curve for easy crypto-currency trade tracking and tax filing.
How do taxes work for Curve.finance?
Swaps and contributions to liquidity pools on Curve are taxed. Here is an overview of key taxable events, but you will want to read our DeFi tax guide for specifics if you used Curve extensively.
Trades between stablecoins are taxable trades. Even if the net tax is zero capital gains because there are no earnings compared to fiat currency prices, you still need to report these trades line by line on your tax filing.
There's no official tax guidance for wrapping tokens, but a conservative approach is to consider it as trading one crypto for another, which results in a realized capital gain or loss.
Similarly, trading CRV governance tokens for other crypto, stablecoins or fiat currency is taxed as capital gains or losses. Other trades between crypto to crypto or crypto to fiat currency are all taxed as capital gains.
Fees earned from providing liquidity, bonuses earned for deposits, and interest earned in the form of additional tokens are taxed as income. However, if your returns are provided in the form of an increase in the value of a token you already hold (instead of additional tokens), this is taxed as capital gains at the time you sell or trade the higher-valued token.
We understand that all of these taxable events are confusing. Our DeFi tax guide walks you through all of the different tax implications in detail if you need a more in-depth read. Additionally, our crypto tax guide provides guidance on a wider range of taxes on crypto transactions outside the DeFi space and in different jurisdictions.
Most of our team has traded on DeFi protocols ourselves, so please ask us anything on our chat function (lower right corner).
How can I simplify my tax filing process for Curve.finance?
Once you have a good understanding of the above tax implications of using Curve, you can see how complicated and tedious it is to untangle your transactions yourself and try to fill in your tax forms.
Crypto tax software automatically imports your transactions on Curve and separates them into capital gains and income tax categories. It then automatically formats your transactions and allows you to automatically calculate your taxes pending on the accounting methods allowed in your country of residence. From there, you can automatically download your tax forms in any format you would like to use for filing.
For United States residents, our VIP package also includes consultations and audit support, so that we can walk you through your taxes on different activities and help you in case the Internal Revenue Service (IRS) has any questions.
How can I lower the taxes on my earnings from using Curve.finance?
There are a few ways to reduce your tax bill from your earnings on Curve. One simple way to reduce your capital gains tax is to take advantage of the lower tax rates on long-term holdings. If you hold your tokens for more than a year before trading or selling, you are taxed at the lower rates. You can also use tax loss harvesting at year-end, a strategy typically utilized by hedge funds attempting to reduce their capital gains taxes on equity trades. If your national tax agency allows specific identification accounting, you can also use our proprietary minimization algorithm.
Learn more in our crypto tax guide or ask us about your specific tax situation on our chat (lower right corner).
Importing a Curve API into TokenTax
Add any ETH address(es) that you've used for Curve to TokenTax and your transactions will be imported. We only require your public address and will never ask for private keys.