Liquidity supplied within a selected price range, allowing a provider to concentrate capital where trades occur.
Concentrated positions (Uniswap v3 and similar) are represented by an NFT and are rebalanced often, and each rebalance is a withdrawal and a new deposit. Under the common position, each of those is an exchange, so an active provider can generate dozens of taxable events a month.
Under the common position, yes: the withdrawal is a disposal of the position and the redeposit is a new acquisition. Fees collected are income.
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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