What Is the Tax Implication of Selling a Fractionalized Token? ⎊ Path

What Is the Tax Implication of Selling a Fractionalized Token?

Selling a fractionalized ERC-20 token is generally treated as a taxable event, similar to selling any other cryptocurrency. The seller realizes a capital gain or loss based on the difference between the sale price and their cost basis for that specific fraction.

The original fractionalization event itself may also be a taxable event, depending on the jurisdiction's rules regarding asset division.

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