What are the tax implications of my foreign-owned LLC participating in a DAO?
My LLC holds governance tokens for a major DeFi DAO and I actively vote on proposals. The DAO also distributes revenue to token holders. I'm trying to understand:
1. Is holding DAO governance tokens a passive investment or active business participation? 2. Are revenue distributions from the DAO taxable? As what kind of income? 3. Could the DAO itself be treated as a partnership for tax purposes, making me a partner?
I'm a non-U.S. person and I manage my LLC from Australia.
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