A token representing an asset or position that generates returns, reflected through changing balances, redemption value, or distributions.
How the yield is delivered decides when it is taxed under common practice: changing balances (rebasing) are income as units arrive; rising redemption value (reward-bearing) is gain on disposal; distributions are income when paid. Holding several kinds at once requires a consistent, documented approach.
It depends on how the yield is delivered. Balance increases and distributions are generally income; rising redemption value is generally gain when you sell or redeem.
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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