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FAQ - How to Categorize Transactions by Checking Blockchain Explorers
FAQ - How to Categorize Transactions by Checking Blockchain Explorers

The guide applies to the EVM chains: Ethereum, Optimism, Arbitrum, Binance Smart Chain, Polygon (Matic), Avalanche, xDai, Fantom, etc.

Layla Huang avatar
Written by Layla Huang
Updated over a week ago

Crypto Tax Calculator automatically categorizes many transactions with sufficient information. However, complex transactions or those in a grey area of tax legislation may remain uncategorized.

Whether you're an accountant or a frequent user with numerous transactions, you can use blockchain explorers to determine transaction details accurately for proper categorization and reconciliation for tax purposes. Blockchain explorers are invaluable tools for this purpose.

Note: This guide does not provide tax advice and is intended for general information purposes only. If you have any doubts about a transaction, please seek advice from a tax professional.

Relevant resources:

How to find the transaction on the blockchain explorer using Crypto Tax Calculator?

Check the transaction

After importing the data, you can find your transactions (similar to the below images) on the Transactions page and Review page.

Click the TxID or arrow on the right-hand side of the Tx ID will take you to the blockchain explorer (see below). It shows you the details of the chosen transaction.

Check the address

You can also check the source/destination addresses by clicking the arrow on the right-hand side of the source/destination.

This will take you to the blockchain explorer (see below), where you can check all transactions that interacted with this address/contract.

Determine if you need to import the address

If you are unsure if you need to import the wallet address, you can inspect the address by using the below technique.

Step 1: Is it a Contract, Address, or Token?

The blockchain explorer shows if the source is a smart contract (Contract), a wallet address (Address), or a token address (Token).

If it’s a Token

In this case, this is not your address and does not need to be imported. The transactions that interact with this token address usually need to be categorized correctly and can NOT be a Send/Receive/Transfer. Check DeFi categories for more details and the discussion below.

Also, there are usually certain transaction categories related to contract interactions. More often than not, these will be DeFi categories, which are discussed below.

If it’s a Contract

Normally, you shouldn't import a contract address into your CTC account. However, if the address is a multi-signature wallet (multisig wallet), you might need to consider importing it. Look for a tab labeled 'multisig' or something similar under 'Contract'.

If it’s an Address

In this case, you need to check if it’s your (or your client’s) wallet address. An address could be:

  • Your (or your client’s) wallet address.

  • A friend’s or family’s address.

  • An unmarked exchange wallet.

  • A third-party wallet. (OTC trades)

Follow the steps below to check if it’s your wallet that needs to be imported.

Step 2: Check the transactions in this wallet.

You should remember some of the transactions you’ve made and be able to recognize your wallet. If you are reconciling for your client, it is better to ask them to check it.

Step 3: Import the address.

If it's your wallet, you can click the address on the transaction in Crypto Tax Calculator and click 'Import Wallet' in the pop-up window to import the wallet.

You can also copy the address and add it on the Integration page.

If it's not your wallet, it does not need to be imported. However, the interacted transactions should be categorized accordingly and can NOT be a Send/Receive/Transfer.

How to categorize it when the source/destination is not your wallet?

1. Observe the transaction (Tx ID/Txn Hash)

a. Overview

You can typically identify the interacted contract in the 'Overview' tab. In this example, it's Dopex: Staking Rewards (rDPX/WETH). Transactions associated with this contract are likely related to staking activities. However, please note that the contract's name, 'staking rewards,' doesn't exclusively represent all transaction types. For more information, click on the 'Interacted With (To)' contract/address, which will be discussed in the following sections.

You can also check “Click to see More”.

This will display the function of this transaction. In the example below, the function is 'claim,' which may indicate staking rewards.

Also, on each on-chain transaction that is imported to Crypto Tax Calculator, there will be a small function pill that shows that particular transaction’s function or transaction signature. These pills can be helpful for categorizing transactions. However, be aware that each smart contract uses its own unique functions for different transactions. This means a “mint” for one contract could mean an entirely different action for another. Some functions are also entirely ambiguous and may need further investigation on the blockchain explorer.

Note: Keep in mind that the function here is not always useful and does not necessarily have the same name as the Crypto Tax Calculator category.

b. Logs

Event logs can be found in the Logs tab. There could be multiple logs listed; sometimes, they are useful, but sometimes, none of them would have useful information. Below, the logs show Unstaked and Transfer, which implies this transaction could be a “staking withdrawal”.

Event logs can be located in the 'Logs' tab. There may be multiple logs listed, and while some are useful, others may not contain valuable information. In the example below, the logs display Unstaked and Transfer, suggesting that this transaction could be a 'staking withdrawal'.

2. Observe the source/destination

As mentioned previously, we can also find information from the source/destination address you interacted with. Clicking the source/destination address in Crypto Tax Calculator or the 'From/To' address on the blockchain explorer will take you to the page that looks similar to the below image.

As explained previously, we need to check if this is a smart contract (Contract), a token contract (Token), or a wallet address (Address). We will explain how to inspect the contract information below.

a. Contract Overview

Some smart contracts show the contract name where the functions can be identified. For example, the one below shows ‘Staking Rewards’. The transactions relevant to this contract are most likely Staking Deposit, Staking Rewards, and Staking Withdrawal.

b. Transactions Tab

You can also find the transactions relevant to this contract and get a better picture of what the transaction could be. In this example, the transactions seem relevant to staking. The transactions that have interacted with this contract can be categorized accordingly.

For more details on how to categorize transactions and the definition, please check our guides:

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