Transfers that occur between two separate exchange or wallets can be classified as Transfer Out and Transfer In in Syla.
Deposits and withdrawals
Deposit and Withdrawal ledgers represent a change in balance for an unknown reason.
Deposit: indicates the balance of an asset went up, but the exact reason isn't known.
Withdrawal: indicates the balance of an asset went down, but the exact reason isn't known.
For tax purposes, it's important to know the specific reason why the balance has changed. We use a more specific classification, to provide the reason why.
Example: Imagine the Deposit on your account was actually due to a Gift that was received from a friend. In that case, you would edit the Deposit and classify to Gift Received. Now the correct tax treatment for gifts can be applied.
Read more: Understanding transaction classifications
Default tax treatment of Deposit and Withdrawal
Syla will still apply a default tax treatment for all Deposits and Withdrawals that don't have a more specific classification.
Deposit: acquisition of the asset at market value.
Withdrawal: disposal of the asset at market value.
Tip: For accuracy, it's recommended to classify all your Deposit and Withdrawal transactions to a more specific type.
Transfers
A transfer is wherever you made a Withdrawal from one data source and have a corresponding Deposit to another data source.
Example: you sent your crypto from one exchange to another exchange.
There are two classifications for describing transfers:
Transfer Out
Transfer In
Both these classifications have no tax outcomes, and can be used to describe the transfer of an asset from one location, to another location.
Note: For tax purposes, a transfer is any movement of an asset, where ownership of the asset has not changed, i.e. it's still your asset, but it's just been moved to another location. A transfer is not-taxable provided ownership of the asset has not changed.
How to identify and classify transfers
If you made transfers between data sources, then you'll need to identify the matching withdrawals and deposits, and classify them as a transfer.
Filter by Withdrawal and Deposit
Go to the Transactions page.
Sort by Oldest to Newest.
Click on the Type filter and select Withdrawal and Deposit. You'll be shown all the Withdrawal and Deposit transactions on all data sources.
Tip: If you have a large number of transactions, then you can also filter by Asset. This can make it easier to go through one asset at a time.
Identify a matching Withdrawal and Deposit
You can now go through the list of transactions and look for a Withdrawal and the matching Deposit transaction.
You can usually tell it's a match because:
The Withdrawal and Deposit are for the same amount and asset.
The Withdrawal and Deposit happen on a similar date and time.
Editing the classification
Once you've found a match, you can edit the transactions and change the classification.
Click on the Withdrawal transaction.
In the top right corner, click Edit.
Change the Withdrawal ledger to Transfer Out.
Click save.
Now do the same for the Deposit transaction.
Click on the Deposit transaction.
In the top-right corner, click Edit.
Change the Deposit ledger to Transfer In.
Click save.
Tip: It's important the Withdrawal amount and Deposit amount are exactly equal, as any difference can lead to inconsistency in the final account balances. If there's a difference, then it's often due to a withdrawal fee or network fee. You can edit the amounts in the transaction and/or add a fee ledger as needed to get the amounts exact.