Liquidity-Pool Gain
Model liquidity-pool contribution gain from caller-supplied basis and value.
Description
A liquidity-pool scenario treats a received value as proceeds from a supplied basis, subtracting fees to estimate gain.
A liquidity-pool scenario treats a received value as proceeds from a supplied basis, subtracting fees to estimate gain. It separately assigns the gross received value as new token basis.1
Model liquidity-pool contribution gain from caller-supplied basis and value.
When to use Liquidity-Pool Gain
Use this tool to model liquidity-pool contribution gain from caller-supplied basis and value.
Choose the specific arithmetic or checklist scenario and establish its input amounts, dates, rates and criteria from the applicable records. Keep currencies, periods and jurisdictions consistent; review the tool-specific assumptions before interpreting the result.
How to use Liquidity-Pool Gain and understand its results
- Choose the specific arithmetic or checklist scenario and establish its input amounts, dates, rates and criteria from the applicable records. Keep currencies, periods and jurisdictions consistent; review the tool-specific assumptions before interpreting the result.
- Enter disposedAssetBasis, receivedLpTokenValue, transactionFees using the field table and calculation rules, then run the tool.
- Read amountRealized, recognizedGain, lpTokenBasis. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| disposedAssetBasis | Basis of assets contributed | number; minimum: 0 | Required |
| receivedLpTokenValue | Fair value of LP tokens received | number; minimum: 0 | Required |
| transactionFees | Transaction fees | number; minimum: 0 | Required |
Enter nonnegative received value, fees and old basis. Return amount realized, signed gain/loss and gross-value basis for received LP tokens. Fees are not added to the new basis.
realized=receivedValue−fees; gain=realized−oldBasis; newBasis=receivedValue Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| amountRealized | Amount realized | number |
| recognizedGain | Modeled recognized gain | number |
| lpTokenBasis | LP-token basis | number; minimum: 0 |
{
"input": {
"disposedAssetBasis": 100,
"receivedLpTokenValue": 150,
"transactionFees": 10
},
"output": {
"amountRealized": 140,
"recognizedGain": 40,
"lpTokenBasis": 150
}
}Limitations and assumptions
This assumes a modeled taxable disposition without determining actual treatment. Pool mechanics, transaction classification and basis allocation require separate analysis.
Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Crypto Swap Gain: Calculate gain and replacement basis for a caller-valued crypto swap. For a complementary task, use Hard-Fork Basis Split: Allocate original basis between hard-fork assets by supplied fair values.
References
-
Liquidity-Pool Gain — tool.io
Similar or alternative tools
- Crypto Swap Gain
Calculate gain and replacement basis for a caller-valued crypto swap.
- Hard-Fork Basis Split
Allocate original basis between hard-fork assets by supplied fair values.