You can find this toggle under Settings -> Portfolio & Tax section. Switching this toggle might change the results of your Income Report and 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.

If the toggle is switched on, the royalties transaction is treated as income on your reports. When you dispose of this asset later, the cost base will be the fair market value at the time you receive the staking reward. See the example below:

If the toggle is switched on, the royalties transaction is treated as a zero-cost buy since there was no cost associated with obtaining the asset. When you dispose of this asset later, the cost base is $0. See the example below:

In both examples, the total ‘gains’ are the same. The difference is when the tax is paid (i.e., at what point in time) as well as which category the taxation sits in (e.g., income vs. capital gains).