Sending crypto between your exchange accounts or wallets is not taxable, and such transactions should be classified as internal transfers to avoid realizing capital gains on them. To handle this, Coinpanda has a built-in algorithm that will identify and automatically classify internal transfers after you have connected all exchange accounts and wallets.
The following conditions must be true for Coinpanda to identify the transaction as an internal transfer:
The Send transaction must have a timestamp less than 12 hours before OR 4 hours after the Receive transaction
The amount received must be at least 90% of the amount sent
The amount received cannot exceed the amount sent
The transaction hash cannot be different for both transactions
The transactions must be of the same currency
Example
You are sending 0.2 BTC from Coinbase to Binance and paying a 0.0005 BTC fee for the transaction. These transactions will first be imported as 0.2 BTC Send (Coinbase) and 0.2 BTC Receive (Binance) but will automatically be merged into a single Transfer transaction since Coinpanda understands this is an internal transfer. This is how the transaction will appear on the Transactions page:
Let's look at a few other examples:
1 BTC Sent (
Aug 20, 2021, 08:00) and 1 BTC Received (Aug 20, 2021, 21:00)
→ The time difference exceeds 12 hours, hence, the transaction won't be identified as an internal transfer by violating rule 1.
1 BTC Sent (
Aug 20, 2021, 12:00) and 1 BTC Received (Aug 20, 2021, 07:50)
→ The timestamp of the Receive transaction is more than 4 hours before the Send transaction. This is a violation of rule 2.
1 BTC Sent (
Aug 20, 2021, 08:00) and 0.8 BTC Received (Aug 20, 2021, 10:00)
→ The amount received is less than 90% of the amount sent. This is a violation of rule 3.
1 BTC Sent (
Aug 20, 2021, 08:00) and 1.2 BTC Received (Aug 20, 2021 10:00)
→ The amount received is more than the amount sent. This is a violation of rule 4.
1 BTC Sent (
Aug 20, 2021, 08:00) and 1 BTC Received (Aug 20, 2021 10:00)
→ All rules are satisfied, and the transaction will be identified as an internal transfer of 1 BTC.
Troubleshooting
A Send and Receive is not identified as an internal transfer
If you have imported both a Send and Receive transaction and they are not merged into a single transfer, it means that at least one of the rules explained above is not satisfied. Please check carefully all transaction details again, including the transaction hash saved. You can contact support if you believe there is an error and that the transactions fulfill the criteria for internal transfers.
Either Send or Receive is missing
If either the Send or Receive transaction is missing, you can still classify the transaction imported as an internal transfer by clicking the three dots icon and then Mark as Internal.
The transaction type will now be changed from Receive to Deposit:
