Do I need to label all transactions?

Quick Answer

Not all deposits and withdrawals need to be labeled. Sometimes a withdrawal should just be a withdrawal, and a deposit should just be a deposit. Trades and transfers are never labeled.

Detailed Explanation

Divly handles unlabeled transactions accordingly:

• A deposit is assumed to be a purchase of cryptocurrency using the price in local currency on the day of the deposit. This affects the cost basis.

• A withdrawal is assumed to be a sale of cryptocurrency using the price in local currency on the day of the withdrawal. In many countries this is a taxable event.

If the default assumption is correct, then you can leave them unlabeled. However, if a label suits the transaction more appropriately then please use that label.

In some cases the deposit or withdrawal should represent one side of a transfer between your own wallets. You can read more about transfers and how to ensure they are correctly matched in this article.