What are the tax implications for starting a DAO?

As of April 2022, there is no specific SEC or IRS guideline on DAO taxation. And since DAOs are not well defined under the business entity laws, it is impossible to apply particular tax rules to them as entities.

However, as an individual DAO investor, you should seek help from a tax expert on reporting taxes resulting from DAO investments in your state. While investing in governance tokens is probably a non-taxable event, selling or even receiving a governance token airdrop may likely bring tax implications to you. Besides, you will attract tax implications if you trade cryptocurrencies via a DAO swap pool. Generally, as the crypto community waits for clear tax guidelines on DAOs, it is necessary to have records of your DAO transactions as an individual investor or member.