Uniswap Tax Reporting
TokenTax imports Uniswap data for easy cryptocurrency trade tracking and tax filing.
What is Uniswap?
Uniswap is a decentralized finance (DeFi) protocol founded in 2018 and based in the United States. Uniswap allows you to swap ETH-based assets and automatically contribute to liquidity pools built on Ethereum contracts.
The Uniswap interface simplifies decentralized trading. Any user can create trade pairs and supply their crypto to Uniswap liquidity pools. To swap tokens, you can simply select the token you want to exchange and the token you want to acquire in the.
You can also easily send tokens to any wallet or swap and send in one combined feature to provide payment in any cryptocurrency. If one of the tokens in the trade pair that you want to trade does not yet have a liquidity pool, you can also add the new trade pair and related liquidity pool(s) easily within Uniswap.
Are there Uniswap tax implications?
It is important to understand that transactions on Uniswap are subject to taxes. Many times DeFi users think about taxes on their exchange trades, but not on their DeFi protocol transactions.
These transactions are recorded on public ledgers, so they can be traced, and it is important to disclose them and pay any tax liability you may have incurred from your earnings.
How do Uniswap taxes work?
Remember that every crypto to crypto trade and crypto to fiat transaction is a taxable event. This means that all of your trades on Uniswap — even if you just tried it a few times to test out the interface — are all subject to taxes.
Exchanges from one crypto to another and from crypto into fiat currency are subject to capital gains or losses taxation because crypto is considered property by the IRS (and many international tax authorities).
The IRS has not given guidance on the tax implications of transferring crypto into Uniswap pools, so there are two ways you could treat them: as taxable or non-taxable. If you treat transfers into Uniswap liquidity pools as a taxable events, you recognize any capital gain or loss on assets that you exchange for corresponding LPTs. You may also elect to file these as non-taxable exchanges. We recommend that you consult with a tax professional about which approach to use. You can read more about this issue in our full DeFi tax guide.
Additionally, when you contribute crypto to a Uniswap liquidity pool in exchange for UNI on which you collect trading fees, this activity is also taxed when you leave the liquidity pool and thus trade the UNI tokens back for ETH or ERC20 tokens.
You can learn more about crypto taxes in the United States and other countries in our guide or ask us anything on our chat function. To learn more about taxes on decentralized finance platforms specifically, read our DeFi crypto tax guide.
How can crypto tax software help you with your DeFi taxes?
Given that your activity on Uniswap is subject to taxes, it is important to be able to consolidate all of your trades (from all DeFi protocols and exchanges) into one tax calculation.
Our TokenTax software automatically pulls all of your Uniswap transactions into your account, along with your other transactions. From there, you can easily calculate your capital gains and losses as well as export your tax forms in a variety of formats.
At TokenTax, we have been testing the tax implications of Uniswap trades since the beginning of 2019 when it first gained notoriety, and most of our team has used Uniswap for over a year.
Our proprietary minimization accounting and year-end tax loss harvesting support can help you save money on taxes. Ask us anything on our chat function (lower right corner), and we will help you with your individual tax situation.
Importing a Uniswap API into TokenTax
Add any ETH address(es) that you've used for Uniswap to TokenTax and your Uniswap transactions will be imported.