Impermanent loss in DeFi Spain: how to declare
What is IL? Temporary loss when providing liquidity as pool token prices diverge. Only realized on withdrawal.
When is IL taxable?
- IL only realized when you withdraw liquidity
- If withdrawal value < deposit value → deductible capital loss
- Calculation: acquisition cost (deposit value) vs sale price (withdrawal value)
Farming rewards: Added to withdrawal value — net result may be positive despite IL.
Multi-token pools (Curve, Balancer): More complex IL calculations — kointax handles automatically.
kointax calculates real IL at withdrawal and determines net capital gain/loss including all rewards.