Whether you are an accountant or just a user who has done way too many transactions, you will be excited to know that there is a way to determine what a transaction actually is. Blockchain explorers are essential tools for anyone wishing to correctly categorize and reconcile transactions for tax purposes. CryptoTaxCalculator automatically categorizes any transactions that have enough information provided, however, any transactions that are more complex or sit in a grey area in your country’s tax legislation will remain uncategorized. Blockchain explorers are extremely handy for correctly determining what a transaction is in order to help you categorize it correctly.

Note: This guide does not contain tax advice and is to be used for general information only. If you are unsure about any transaction, please consult a tax professional for advice.

Relevant resources:

How to find the transaction on the blockchain explorer using CryptoTaxCalculator?

1. Check the transaction

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

2. 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

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).

2. If it’s a Contract or Token

In this case, this is not your address and does not need to be imported. However, the transactions need to be categorized correctly and can NOT be a Send/Receive/Transfer.

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

3. 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.

a. 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.

The total transactions in a personal wallet are usually less than 10,000. While an unmarked exchange wallet could have a massive transaction volume.

b. Check the value and token holdings.

c. If it’s your address.

You can click the address in CryptoTaxCalculator and import the wallet or copy the address and add it on the Import page.

d. If it’s not your address.

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 a Contract/Token?

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

a. Overview

You can usually see what contract was interacted with in the Overview tab. In this example, it’s Dopex: Staking Rewards (rDPX/WETH). The transactions associated with this contract would most likely be staking relevant. Keep in mind that “staking rewards” is not the only type of transaction relevant to this contract despite its name. Clicking the contract/address interacted with (To) will give you more information which will be discussed further in the following sections.

You can also check “Click to see More”.

This will show the Function of this transaction. In the example below, the function is “claim”, which could indicate staking rewards.

Also, on each on-chain transaction that is imported to CryptoTaxCalculator, 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 CryptoTaxCalculator 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”.

2. From 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 CryptoTaxCalculator 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 check the information in the contract 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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