Tokens that represent claims on off-chain assets such as US Treasury bills, money market funds, or private credit, with yield paid on-chain.
The token is property, so buying and selling it is a capital transaction. The yield, whether paid as distributions or as a rising redemption value, is generally interest income; some issuers report it on Form 1099-INT or 1099-DIV, and many do not. Foreign issuers can raise PFIC questions for US holders.
Generally yes, as ordinary interest income, whether or not the issuer sends a form. Check whether the issuer is a foreign fund, which can trigger PFIC treatment.
Source: IRC 61; IRC 1291 to 1298
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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