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Tax toggle - Treat bridges as non-taxable disposal
Tax toggle - Treat bridges as non-taxable disposal
Layla Huang avatar
Written by Layla Huang
Updated over a week ago

You can find this toggle under Settings -> Portfolio & Tax section. Switching this toggle might change the results of your Capital Gains Report. The default setting depends on your tax jurisdiction. The choice of settings may impact your tax liability, so it's essential to consult with your accountant or local tax professionals about your situation before making any changes.

Toggle on

When the toggle is switched on, all your bridge transactions are treated as non-taxable disposal, which means your overall account balance remains unchanged, as the bridging process is considered a transfer rather than a disposal or acquisition. The cost base is carried from the previous acquisition price. See the example below:

Category

Asset

Date

Market price

Cost base

Capital gains

Overall balance

Buy

1 ETH

Jan. 1, 2022

$4,000

$4,000

-

1 ETH

Bridge

1 ETH

Feb. 1, 2022

$3,000

$4,000

-

1 ETH

Sell

1 ETH

Mar. 1, 2022

$2,500

$4,000

($1,500)

0 ETH

Toggle off

When the toggle is switched off, all your bridge transactions are treated as taxable disposal, which means they are treated as sells, The capital gains/losses are realized in the transaction. See the example below:

Category

Asset

Date

Market price

Cost base

Capital gains

Overall balance

Buy

1 ETH

Jan. 1, 2022

$4,000

$4,000

-

1 ETH

Bridge

1 ETH

Feb. 1, 2022

$3,000

$4,000

($1,000)

0 ETH

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