An Aave receipt token representing supplied assets. Its balance reflects interest earned on the underlying lending position.
Supplying to Aave and receiving aTokens is treated by most practitioners as a deposit rather than an exchange, because the aToken is redeemable one-for-one plus interest. The interest itself, which shows up as a growing aToken balance, is ordinary income as it accrues and becomes accessible.
Under the common position, no: the aToken is a receipt for a deposit, not a new asset. The interest reflected in the balance is income. We document the position and apply it consistently.
Source: No IRS guidance as of September 2026; IRS Notice 2014-21 (property treatment)
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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