This is the row of the index where the two biggest English-language tax authorities are furthest apart, and the gap is not a matter of degree. One of them has published nothing this site could quote, and the other has a manual section addressing the lending transaction directly. Saying which is which is more useful than a paragraph that reads as though both had answered.
The IRS pages read here do not mention DeFi at all
Neither the digital assets hub page nor the virtual currency FAQ uses the words decentralized finance or DeFi. That is a recorded absence on this site, with the page named and the date it was read, not an inference that DeFi is untaxed. The FAQ also carries a scope note limiting it to taxpayers who hold virtual currency as a capital asset, which is narrower than most DeFi positions are.
What the IRS does say that a DeFi user will land on
The digital assets page treats receipt as the trigger. Check the Yes box if you received digital assets as payment for property or services, as a reward or award, or from “Mining, staking and similar activities”. To report that income, use Form 1040 Schedule 1. Whether a particular DeFi return is a similar activity is exactly the question the guidance does not reach.
HMRC addresses the lending transaction by name
CRYPTO61130 of the Cryptoassets Manual describes it plainly: the lender or liquidity provider, in exchange for lending tokens to a borrower or staking them with a DeFi lending platform, may receive a reward, and “this return may be treated as taxable income of the lender/liquidity provider for the purposes of Income Tax or Corporation Tax”. The plain-English page is blunter still: income earned from DeFi counts as income.
Why the two columns are not interchangeable
A DeFi user reading UK guidance and filing in the US is reading someone else's rules, and this site keeps the columns apart for that reason. HMRC's manual has a whole DeFi section, CRYPTO60000, in its contents. The IRS has a broker reporting regime and Form 1099-DA instead, and its pages describe that rather than the underlying transactions.
Questions people ask about defi taxes
Does the IRS say DeFi is tax-free?
No, and nothing here should be read that way. The two IRS pages in this ledger simply do not use the term, which this site records as not published, naming the page and the date. An absence in guidance is not a treatment.
What does HMRC say a DeFi return is?
CRYPTO61130 says the return paid to a lender or liquidity provider “may be treated as taxable income” for Income Tax or Corporation Tax purposes, pointing on to CRYPTO61200 and CRYPTO61400. The receiving guidance adds that income earned from DeFi counts as income.
Does HMRC treat DeFi rewards differently from staking?
The plain-English page groups them: tokens from mining, staking or lending, including from DeFi, are treated as other taxable income where the recipient is not carrying on a trade. The manual then distinguishes the DeFi lending transaction in its own section.
Where would a US DeFi income figure go on a return?
The digital assets page names Form 1040 Schedule 1 for ordinary income related to digital assets, listing forks, staking and mining. It does not say whether a given DeFi position produces income of that kind, and this site does not supply the answer.