Aave Tax Calculator
Aave lending creates multiple taxable events that most tax tools miss entirely - the deposit, the interest accrual, the aToken cost basis, and the withdrawal are all separate tax events. DYOR.tax automatically identifies and classifies every Aave interaction from your wallet history.
Add your wallet address and DYOR.tax handles the full Aave tax lifecycle. Deposits, aToken tracking, interest income, and liquidations - calculated automatically. Free instant preview.
Try the MetaMask Calculator →How Aave lending is taxed
When you deposit ETH into Aave, you receive aETH in return. In most jurisdictions this is treated as two simultaneous events, though the exact treatment depends on how your country classifies receipt token transactions:
- Disposal of ETH at current market price - generally a taxable event in most jurisdictions. Your gain or loss is the difference between the current price and your original cost basis for that ETH.
- Acquisition of aETH at that same price - this becomes your new cost basis for the aToken.
When you withdraw, you dispose of your aETH and reacquire the underlying ETH - another taxable event. The interest that accrued as additional aTokens is treated as income at fair market value when received.
Aave borrowing and tax implications
Taking out a loan against your Aave collateral is generally not a taxable event - you're borrowing, not selling. However, several related events do have tax consequences:
- Collateral liquidation. If your health factor drops below 1 and Aave liquidates your collateral, that is a taxable disposal at the liquidation price.
- Using borrowed funds to buy other assets. The purchase itself is not taxable, but when you later sell those assets, you calculate gains from that acquisition cost.
- Repaying the loan. Loan repayments are not taxable events - you're returning borrowed funds, not disposing of an asset.
- Borrowing interest paid. Generally not deductible for individuals, though the rules are jurisdiction-dependent.
Aave liquidations - a commonly missed tax event
Liquidations are one of the most frequently missed tax events in DeFi. When your collateral ratio falls below Aave's liquidation threshold, a liquidator repays part of your debt and receives your collateral at a discount (typically 5-10% below market). From a tax perspective, this is a disposal of your collateral at the liquidation price.
The gain or loss is: liquidation proceeds minus your original cost basis for the seized collateral. The liquidation penalty is reflected in the reduced proceeds, not as a separate deduction.
DYOR.tax automatically detects liquidation events in your wallet history and calculates the resulting gain or loss.
How DYOR.tax handles Aave
- Add your EVM wallet address
- The scanner detects all Aave V2 and V3 interactions automatically
- Deposits are classified as disposals of the underlying asset; aToken cost basis is tracked from entry
- Interest income is recorded at fair market value as it accrues
- Liquidations are detected and the resulting gain or loss is calculated
- All Aave activity merges with your exchange CSV into one unified report
Supported Aave versions and chains
DYOR.tax covers Aave V2 and V3 across all major EVM networks: Ethereum, Arbitrum, Optimism, Base, Polygon, Avalanche, and all other supported EVM chains. Add your wallet address once and every chain is scanned.
Country-specific Aave tax treatment
- United States. Deposit treated as disposal - gain or loss on Form 8949. Interest income on Schedule 1. Liquidations on Form 8949.
- United Kingdom. Deposit treated as disposal with Section 104 pooling applied to the underlying asset. Interest income as miscellaneous income on SA100. All values in GBP.
- Canada. Deposit treated as disposition, ACB method. Interest income reported as income. 50% inclusion rate on capital gains.
- Australia. Deposit treated as CGT event, FIFO cost basis. Interest income is assessable income. 50% CGT discount available if aTokens held 12+ months before withdrawal.