You can find this toggle under Settings → Tax → Capital gains category options 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 outgoing gift transactions are treated as non-taxable disposals (e.g. charity donations in some tax jurisdictions). This decreases your overall account balance but is not added to your capital gains. See the example below:
Date | Category | Asset | Market price | Cost base | Capital gains | Overall balance |
Jan. 1, 2022 | Buy | 1 ETH | $4,000 | $4,000 | - | 1 ETH |
Feb. 1, 2022 | Outgoing gift | 1 ETH | $3,000 | $4,000 | $0 | 0 ETH |
Toggle off
When the toggle is switched off, all your outgoing gift transactions are treated as taxable disposal, which means they are treated as sales. The capital gains/losses are realized in the transaction. See the example below:
Date | Category | Asset | Market price | Cost base | Capital gains | Overall balance |
Jan. 1, 2022 | Buy | 1 ETH | $4,000 | $4,000 | - | 1 ETH |
Feb. 1, 2022 | Outgoing gift | 1 ETH | $3,000 | $4,000 | ($1,000) | 0 ETH |
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