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 personal use transactions are treated as non-taxable disposal (e.g., your sole purpose in buying and disposing of cryptocurrency is to acquire a product or service). 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 | Personal use | 1 ETH | $3,000 | $4,000 | $0 | 0 ETH |
Toggle off
When the toggle is switched off, all your personal use 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 | Personal use | 1 ETH | $3,000 | $4,000 | ($1,000) | 0 ETH |
If you have any questions or need help, we're here for you! Feel free to reach out to us via the in-app chat in the bottom-right corner or send your inquiries to [email protected].