Unrealized Gains Feature
The Unrealized Gains Feature allows identifying of holding period as well as current positive and negative gain of all your asset tranches as well as their current depot location. If an asset tranche has been held for more than 365 days, for example, you can easily identify on which depot this tranche is currently located and whether a sale of this tranche would enable positive or negative gains (profit or loss). This information is crucial in order to optimize your crypto tax outcome over the whole tax year.
For Germany, a tax-free sale of the corresponding tranche is possible from a holding period of 365 days. According to FIFO (First in-First out), the oldest tranche of an asset within a portfolio is always on top and therefore sold or sent out first!
For the USA, a sale of a tranche that has been held for more than 365 days falls under long-term capital gains. According to FIFO (First in-First out), the oldest tranche of an asset within a portfolio is always sold or sent out first!
How do I use the Unrealized Gains feature and what to be aware of?
The Unrealized Gains function can be called up via the menu item Unrealized Gains.
- Navigate to the Unrealized Gains menu item.
- Now update your asset tranches by clicking the Recalculate button.
Important: The calculation shall always be based on your complete and error-free transaction history, similar to your tax report. If the calculation is blocked by errors, you can fix them with the following instructions.
Also always make sure that all your Deposits and Withdrawals in your Transactions tab are correctly linked because, without a correct and complete linking of your transactions, acquisition times and acquisition costs cannot be transferred! - Now the entire history of all asset tranches ever purchased is displayed in the form of a detailed list that can either be shown in Asset View or in Depot View.
- If you want to realize gains (+values) or losses (-values), the oldest asset tranche in the corresponding portfolio is always sold first.
The underlying tax logic is also referred to as FIFO (First In-First Out) and applies separately to each depot (depot segregation). However, acquisition costs and acquisition date can be transferred from one depot to another by correct linking.
With the help of this feature, depending on your tax country, it is possible to collect positive (+) as well as negative (-) profits in order to optimize your tax burden within the corresponding year (balancing profits and losses).
Always keep in mind that within a depot, the oldest asset tranche, meaning the one that has been held the longest, is always sold first.
Asset View Example
The Asset View is organized into three layers. Thereby you can quickly identify all your tax-free assets or assets held for a long-term period as well as the related Unrealized Gains.
In this example, we simply extended the details of the Asset “IOTA" in the Asset View:
- In the first row/layer you can see a green circle (pie chart) in the column “Holding over 1 Year”.
This circle represents the percentage of 1361 IOTA held for more than 365 days, i.e. 966 IOTA in green.
The column “Holdings” shows the total amount of 1361 IOTA you are holding overall.
Next to it the “Value” and the “Unrealized Gains” of this total 1361 IOTA holdings are shown.
Tip: The green and red unrealized gains are live values, so no recalculation is needed if there hasn't been a change in IOTA transactions. - The second row/layer in the Asset View shows the Depot(s) where your IOTA is located at. Depending on the number of Wallets or Exchanges your IOTA will be displayed as in your real Depot allocation. (In this example, IOTA is only held on Bitpanda Pro)
The “Value” and “Unrealized Gains” in this second layer are referring to the total "Holdings" of IOTA on this particular Depot.
(This means that according to the example 1361 IOTA are worth 1443€ and the unrealized gains for this total holdings are 880€) - The same logic for "Value" and "Unrealized Gains" underlies the third row/layer.
We also call this layer the transaction or asset tranche layer. This is the lowest level where all asset tranches in their raw form are shown. This means that your "Holdings" show the actual amount of the associated transaction/tranche as well as the "Value" and "Unrealized Gains" of this transaction/tranche.
The most important information at this point is that the oldest asset amount which is also referred to here as or transaction/tranche is always at the top of the list. This is of high importance for users (Germany, Austria, USA, ...) that benefit from the FIFO rule (First in-First Out).
For assets whose holding period does not exceed 365 days, "-" is displayed. This refers to the section of the pie chart from level 1&2 that is greyed out or so to say not green.
As further examples:
If you only want to sell the 395 IOTA tranche you could send the 3 other IOTA Tranches that are stacked above to another depot, in order to then be able to realize losses (-28€) on the Bitpanda Pro Depot.
If you just want to sell all of your tax-free or long-term IOTA tranches you can do so immediately by selling the tranches of 183, 270, and 512 IOTA on Bitpanda Pro.
Depot View Example
The Depot View also consists of three layers and works in the same manner as the Asset View just that all your Depots are shown in the first row/layer instead. Thereby you can quickly identify all your assets held for a long-term period of at least 365 days as well as their "Value" and related "Unrealized Gains" on your particular Depot.
In this example, we simply extended the details of the Asset “IOTA" in the Depot View:
- The first row/layer shows [BTC +6 other assets] that are older than 365 days in the “Holding over 1 Year” column. Next to it, your highest “Holding” in the form of [BTC, +9 other asset] holdings are displayed. Most importantly the “Value” and “Unrealized Gains” also refer to your total holdings [1.2682 BTC +9 other assets] on this particular Depot.
(This means that according to the example 1,2682 BTC +9 other assets represent the total "Value" of 100,871€ and the "Unrealized Gains" for these total holdings on this Depot are 84,112€) - 3. The second and third-row/layer then follow the same logic as described in the Asset View besides layer 2 being the total amount of a particular asset instead of the depot. This means that the Asset View example descriptions from above also do apply here.
Always keep in mind that within a depot, the oldest asset tranche, meaning the one that has been held the longest, is always sold first.
Tip: You can test the Unrealized Gains Feature and the tax implications of a Trade by manually adding a New Transaction in the corresponding Depot and then running a "Recalculation". But don't forget to delete this transaction afterward.