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Understanding transaction classifications
Understanding transaction classifications

Learn what all the different transaction and ledger classification in Syla mean.

Updated over a week ago

Syla has an extensive classification system to ensure you can achieve the correct tax outcomes and have a good understanding of your transaction data.

While Syla, will apply these classifications for you automatically where possible, it's still important to understand what they mean, particularly if you need to make any manual re-classifications.

Classifications

Tax Notes

Some relevant tax notes on each transaction type have been provided in the tables below. These notes are all specific to Australian tax law. The tax notes are generally applicable to individual taxpayers who are holding crypto for investment purpose, and refer to the tax treatment when the asset involved in the transaction is crypto.

Ultimately, the tax treatment of each transaction type will vary based on the following factors:

  • entity type.

  • tax settings that have been applied.

  • the asset involved in the transaction.

  • the other ledgers present in the transaction.

For example, if the transaction is Commission but the asset received is AUD instead of crypto, then while the amount will be recorded as Ordinary Income, the AUD amount won't be recorded as a CGT asset.

Syla automatically takes all of these factors into account, to ensure the correct tax calculations are done. You can view the actual tax outcomes of a transaction at any time, by clicking on the transaction from the Transactions page in Syla, which will bring up a detailed view.

Transactions

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Name

Description

Tax Notes

An asset is bought, sold or swapped for another asset.

Any assets that were disposed will create a CGT event.

The same asset is updated to a new ticker symbol.

This is a non-taxable event. The cost base will be carried over.

Wrap

An asset is wrapped to an alternative representation of the same asset on a different blockchain.

The default treatment is the same as a Trade.

Liquidity In

Two assets are contributed into a liquidity pool and an LP token is received.

The default treatment is a taxable event.

Liquidity Out

An LP token is disposed and two assets are removed from a liquidity pool.

The default treatment is a taxable event.

Group

This is used to collect related transactions together in Syla.

Does not impact tax treatment.

Ledgers that increase balance

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Name

Description

Tax Notes

An unknown deposit of an asset, you can provide a more specific reason for the deposit.

Acquisition of a CGT asset at market value.

Internal transfer from another location.

Not taxable.

Note: This ledger type does not affect the overall portfolio balance, as it's assumed you still own the asset. For this reason, a Transfer In should always have a corresponding Transfer Out of the same amount and asset

Profit from a genuine game of chance.

Not taxable. However it will still result in the acquisition of a CGT asset at market value.

Initial funding for the activity from a bank account.

Not taxable if AUD.

A new blockchain is branched off from an existing one, resulting in a new asset being created.

The CGT asset will receive a cost base of zero.

Acquisition at Zero Cost

An asset is acquired for nothing in return.

The CGT asset will receive a cost base of zero.

Gift received with no obligation to repay.

Acquisition of a CGT asset at market value.

Borrow

An asset is borrowed, there is an obligation to repay the asset back at some point in the future.

Acquisition of a CGT asset at market value.

Payment Reversal

A payment for goods and services was sent, but it was later reversed.

Acquisition of a CGT asset at market value.

Airdrop of an asset.

Ordinary income.
Acquisition of CGT asset at market value.

Commission

Referral or affiliate commissions earned.

Ordinary income.

Acquisition of CGT asset at market value.

Promotions

Rewards from a giveaway promotion or signup bonus.

Ordinary income.

Acquisition of CGT asset at market value.

Distribution

An asset is received as a distribution.

Ordinary income.

Acquisition of CGT asset at market value.

Reward

A reward or payout that has been received.

Ordinary income.

Acquisition of CGT asset at market value.

Interest Received

Interest earned.

Ordinary income.

Acquisition of CGT asset at market value.

Mining Income

Reward earned for mining crypto.

Ordinary income.

Acquisition of CGT asset at market value.

Staking Income

Reward earned for staking crypto.

Ordinary income.

Acquisition of CGT asset at market value.

Lending Interest

Interest payment received on an asset that was lent out.

Ordinary income.

Acquisition of CGT asset at market value.

Dust

Negligible amount of an asset received, often due to spam.

Ordinary income.

Acquisition of CGT asset at market value.

Fee Refund

Refund on fees that were previously paid.

Ordinary income.

Acquisition of CGT asset at market value.

Payment Received

Received a payment for providing goods or services.

Ordinary income.

Acquisition of CGT asset at market value.

Cashback

Cashback reward for using a debit or credit card.

Ordinary income.

Acquisition of CGT asset at market value.

Trade Rebate

A rebate received for executing a trade. This is the opposite of a Brokerage Fee.

Ordinary income.

Acquisition of CGT asset at market value.

Derivatives Profit

Realised profit from a derivatives contract.

Ordinary income.

Acquisition of CGT asset at market value.

Futures Profit

Realised profit from a futures contract.

Ordinary income.

Acquisition of CGT asset at market value.

Futures Funding Rate Profit

A form of profit that occurs in perpetual futures contracts.

Ordinary income.

Acquisition of CGT asset at market value.

Ledgers that decrease balance

All ledgers that decrease balance will result in a CGT event if the asset is a CGT asset.

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Name

Description

Tax Notes

An unknown withdrawal of an asset, you can provide a more specific reason for the withdrawal.

Disposal of a CGT asset at market value.

Internal transfer to another location.

Not taxable.

Note: This ledger type does not affect the overall portfolio balance, as it's assumed you still own the asset. For this reason, a Transfer Out should always have a corresponding Transfer In of the same amount and asset

Funding returned from the activity back to a bank account.

Not taxable if AUD.

Asset is gone and can not be recovered due to a scam, insolvency or lost access.

Disposal of a CGT asset for zero proceeds.

Gift sent with no obligation to be repaid.

Disposal of a CGT asset at market value.

Loss due to a genuine game of chance.

Not taxable. However it will still result in the disposal of a CGT asset at market value.

Disposal at Market Value

An asset is disposed for the market value of the asset.

Disposal of a CGT asset at market value.

Borrow Repaid

A prior borrowed asset is repaid to the lender.

Disposal of a CGT asset at market value.

Payment Sent

Sent a payment for goods or services.

Disposal of a CGT asset at market value.

Payment Reverted

A payment for goods and services was received, but it was later reversed.

Disposal of a CGT asset at market value.

Derivatives Loss

Realised loss from a derivatives contract.

Revenue loss.

Disposal of a CGT asset at market value.

Futures Loss

Realised loss from a futures contract.

Revenue loss.

Disposal of a CGT asset at market value.

Futures Funding Rate Loss

A form of loss that occurs in perpetual futures contracts.

Revenue loss.

Disposal of a CGT asset at market value.

Other Loss

Any other revenue loss.

Revenue loss.

Disposal of a CGT asset at market value.

Disposal at Zero Value

An asset is disposed with nothing received in returned.

Disposal of a CGT asset for zero proceeds.

Brokerage Fee

Fee charged on executing a trade.

Where attached to a Trade, the brokerage fee will be capitalised into the cost base of the CGT assets.

Deposit Fee

A fee incurred due to a deposit.

Expense.
Disposal of a CGT asset at market value.

Withdrawal Fee

Fee incurred due to a Withdrawal.

Expense.
Disposal of a CGT asset at market value.

Network Fee

Fee paid to transfer crypto on-chain.

Expense.
Disposal of a CGT asset at market value.

Service Fee

Service fee charged.

Expense.
Disposal of a CGT asset at market value.

Statement Fee

Fee charged by a platform for generating an account statement or report.

Expense.
Disposal of a CGT asset at market value.

Payment Fee

Fee on a payment sent.

Expense.
Disposal of a CGT asset at market value.

Liquidation Fee

Fee charged when a derivatives position is liquidated.

Expense.
Disposal of a CGT asset at market value.

Derivatives Fee

Fee charged in relation to derivatives trading.

Expense.
Disposal of a CGT asset at market value.

Futures Fee

Fee charged in relation to futures trading.

Expense.
Disposal of a CGT asset at market value.

Other Fee

Any other fee.

Expense.
Disposal of a CGT asset at market value.

Detailed explanation of specific classifications

We've provided some more detailed information for certain classifications below, to help you understand which may be most appropriate.

Trade

One asset is disposed in return for the acquisition of another asset. A trade will normally have an associated Brokerage Fee, which is capitalised into the cost base of the CGT assets in the trade.

Syla automatically applies valuation logic to ensure that the disposed asset has equal market value to the asset acquired in the trade. This ensures consistent tax outcomes.

Rebase

Rebases are intended for when assets are re-branded as part of a marketing exercise, or where there otherwise should not be any immediate tax outcomes. It allows carrying over the cost base from a quantity of one asset, to a new quantity of another asset.

The most common usage is for:

  • Ticker code changes

  • Re-denominations (similar to a share split or consolidation)

Deposit and Withdrawal

Deposit and Withdrawal classifications are the default classification for an increase or decrease in balance where Syla does not know the immediate reason why it occurred.

Deposits and Withdrawals should be edited and re-classified to a more accurate classification. e.g. if the Deposit was actually due to an airdrop, then the classification would be changed to Airdrop. This ensures the correct tax outcomes are achieved.

Capital Invested / Returned

Capital Invested and Capital Returned are how you represent movements of AUD into the investment activity. Having these classifications means you don't have to track the bank account itself and it provides a convenient cut-off for the scope of activity.

These classifications can also be used for crypto assets in which case the tax treatment is either an acquisition or disposal of the CGT asset at market value.

Transfer In / Transfer Out

Transfer In and Transfer Out should be used for transfers when ownership of the asset has not changed, such as a transfer from one exchange platform to another. Transfer In and Transfer Out are not taxable events, and ensures there are no CGT events when moving assets.

While Transfer In and Transfer Out do affect the balance of the data source they occur on, they don't affect the overall portfolio balance. When using these ledger types, it's assumed that you still own the asset that was transferred.

Note: It's important to ensure that a Transfer Out always has a matching Transfer In of the same amount and asset.

e.g. if you have a Transfer Out of 1 ETH from one data source, there should be a corresponding Transfer In of 1 ETH to another data source.

Chainsplit

A chainsplit is similar to an Airdrop. The definition for a chainsplit is where a new blockchain is split from an existing blockchain. All existing token holders automatically receive the same quantity of tokens as they held on the original.

It's important to understand the difference between a Chainsplit and an Airdrop, as the tax implications are very different. The new asset received in a Chainsplit will be given a cost base of zero and there is no Ordinary Income to declare.

Airdrop

Airdrops are assets that are normally received either for free or for participating in an Airdrop program or other activity. They are often used as a way to promote a new blockchain project.

An airdrop differs from a chainsplit as it does not affect the underlying blockchain. It is achieved by issuing new tokens on an existing blockchain. Airdrops are treated as Ordinary Income.

Gambling Profit / Loss

Although relatively rare, you are able to classify transactions as Gambling Profit and Gambling Loss. These gambling profits are non-assessable and gambling losses are non-deductible in Australia.

Although gambling profits are non-assessable, the acquisitions are recorded and disposals of CGT assets are still generally taxable, and will be tracked in Syla.

Important: investing in crypto is not considered gambling for tax purposes.

Gift Received / Sent

Gifts are tracked as a CGT asset that was acquired at the market value on the day it was received.

Gifts that are sent result in a CGT disposal that will have proceeds calculated at the market value on the day it was sent.

Unrecoverable

Unrecoverable is effectively the write-off of a CGT asset where the proceeds of the disposal will be zero. This is intended for common situations such as:

  • theft

  • scam

  • lost

  • delisted

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