A smart contract that pools deposits and applies a defined strategy, often issuing shares that represent each depositor's interest.
Vault shares are a claim on a changing pool of assets, which makes the deposit look like an exchange under the common position: you dispose of the deposited token and acquire vault shares. Gains inside the vault are then reflected in share value and taxed when you redeem.
Under the common position, yes, because vault shares represent a different asset than what you deposited. A minority position treats simple single-asset vaults as deposits. We document the position taken.
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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