Several settings are found under the Portfolio and Tax tab on the Settings page. We will in this article explain how changing these settings may affect your tax reports.

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If this setting is turned ON, Coinpanda will include capital gains from disposing of fiat currency in your tax report. In most countries, however, you should not report gains from selling or disposing of fiat currencies, so this setting is set to OFF by default.

If you decide to turn the setting on, be aware that you must accurately track the cost basis for all fiat currencies traded. Not all exchanges provide this data from API, so this may require more work on your side to avoid paying too much tax.

Let's assume your local currency is set to USD, and you have traded EUR pairs on Coinbase, such as BTC-EUR or ETH-EUR. Having this setting turned on will result in all transactions where you are selling EUR being included in your capital gains summary and tax reports. In this case, the capital gains for EUR will be calculated similarly to capital gains for cryptocurrencies.

The Cost Analysis tab will only be visible with the setting turned on. In the example seen below, the realized gains are equal to the market value since a zero cost is assumed due to the missing purchase history of how 500 EUR was acquired earlier.

If you turn this setting OFF, capital gains from margin, futures, and derivatives trading will not be included in your capital gains summary and reports. This setting should always be ON unless you want to fully exclude all margin/futures gains from your tax report.

When this setting is turned OFF, all airdrops will take on a zero acquisition cost and be excluded from your reports' Income section. The default setting is ON since almost all countries consider airdrops taxable income at the time of the transaction. In general, you should only change this setting to off if airdrops are not taxed as income in your country.

The same applies also to the other three settings below:

When this setting is turned ON, all transactions where a cryptocurrency is exchanged for another cryptocurrency will transfer the cost basis from the sold currency to the acquired currency without realizing any capital gains.

The default setting is OFF since crypto-to-crypto trades are taxable events in almost all countries today. You should only change this setting to on if you are 100% sure that your country does not tax crypto-to-crypto trades.

When this setting is turned ON, all transactions related to bridging a cryptocurrency from one blockchain to another will transfer the cost basis from the sold currency to the acquired currency without realizing any capital gains.

The default setting is OFF since the tax regulations surrounding bridging crypto assets between blockchains are not clear today. We recommend not changing this setting unless you have confirmed with the tax authority in your country that bridging assets is not considered a taxable event.

When this setting is turned ON, all transactions related to adding or withdrawing liquidity from a pool will transfer the cost basis from the sold currency to the acquired currency without realizing any capital gains.

The default setting is OFF since most tax authorities consider liquidity operations similar to selling a cryptocurrency. We recommend not changing this setting unless you have confirmed with the tax authority in your country that adding or removing liquidity is not considered a taxable event.

When this setting is turned OFF, all transactions related to sending cryptocurrency to a staking pool will realize the capital gains on the amount sent, which is considered equal to selling the asset for fiat from a tax perspective. Similarly, transactions related to receiving cryptocurrency from a staking pool will increase your overall balance, which is considered equal to buying the asset for fiat.

However, if you believe sending crypto to a staking pool or staking contract is not taxable in your country, you can change the setting to ON to avoid realizing any capital gains on the amount sent. When the setting is on, Coinpanda will not calculate the cost basis (acquisition cost) for the asset sent, which means the transaction will be considered equal to an internal transfer.

When this setting is turned OFF, all transactions related to sending cryptocurrency as collateral for taking out a loan will realize the capital gains on the amount sent, which is considered equal to selling the asset for fiat from a tax perspective. Similarly, transactions related to receiving the collateral back in your wallet or account will increase your overall balance, which is considered equal to buying the asset for fiat.

However, if you believe sending crypto as loan collateral is not taxable in your country, you can change the setting to ON to avoid realizing any capital gains on the amount sent. When the setting is on, Coinpanda will not calculate the cost basis (acquisition cost) for the asset sent, which means the transaction will be considered equal to an internal transfer.

The tax treatment of gifting cryptocurrency varies from country to country, which is why we allow you to change whether gifting should realize capital gains or not.

If turned OFF, realized gains from outgoing gifts will not be included in your capital gains summary and reports. The default setting is ON, which is also a conservative approach due to the sometimes complex tax rules surrounding gifts.

When this setting is turned OFF, realized gains from repaying a loan will not be included in your capital gains summary and reports.

Because the tax rules for crypto loans are unclear today and involve many complex considerations, the default setting is ON, meaning that all transactions involving repaying a loan will realize capital gains on the asset sent.

When this setting is turned ON, Coinpanda will realize all fees associated with sending or receiving cryptocurrency at market price and include the realized gains in your capital gains summary and reports. If turned OFF, no gains will be realized.

From a tax perspective, it is not entirely clear whether gains from transfers should be taxed. However, paying for a crypto transaction can be considered equal to paying for a service, hence why the majority of countries will most likely want to tax the fees paid from such transactions. Remember that you might also realize a loss on the fee, resulting in less tax to pay. We recommend keeping this setting on unless you have discussed and clarified this with your accountant or local tax authority.

When this setting is turned OFF, realized gains from transactions tagged as Cost, Approval, or Interest will not be included in your capital gains summary and reports. Similarly to transfer fees, we recommend keeping this setting ON unless you have a good reason not to do so.

PS! Even with this setting off, the amount will still be included in your Expense summary in the tax report. You might be able to report these costs as expenses in your tax return, but always consult a tax professional or contact your tax authority directly when in doubt.

When this setting is turned OFF, realized gains from transactions tagged as Margin Trading Fee or Margin Funding Cost will not be included in your capital gains summary and reports.

When this setting is turned ON, stablecoin prices will be used to calculate the proceeds and acquisition costs associated with transactions where a stablecoin is exchanged for another cryptocurrency. Having this setting turned on will most likely increase the accuracy of the resulting capital gains due to the close-to-zero intra-day volatility of stablecoins.

When this setting is turned ON, prices of the top 50 cryptocurrencies according to the total market cap will be used to calculate the proceeds and acquisition costs associated with transactions where a cryptocurrency in the top 50 is exchanged for another cryptocurrency. Having this setting turned on can potentially increase the accuracy of the resulting capital gains due to the often lower intra-day volatility of cryptocurrencies in the top 50 compared to cryptocurrencies with a relatively lower market cap.