Wondering About Crypto Gains and Taxes?
Now’s the time to get a deduction or offset your gains.
It’s that time of year again where you have a chance to make tax-deductible donations to reduce your taxable income and capital gains. Donating bitcoin can have exceptional benefits for your pocket and causes you support.
You can listen to our recent podcast “How Donating Crypto Can Help You Save on Taxes – Ep. 94” with Laura Shin on Unchained, alongside Joe Waltman at GiveCrypto, and learn a lot more about crypto and charity. The whole show is really enlightening, and we dive into the specifics of tax benefits at min 50:37 (ish).
We’ve also put together some information below that we hope you find useful this tax season and year-round.
- Donations must be made before TAX YEAR END (December 31)
- Capital gains on BTC are taxable
- Even though the market is down, anyone who bought BTC pre mid-2017 may still have gains!
- Many may have not reported gains in the past, but those days have gone
- Donations are a great way to give back & reduce taxes
- IRS guidance defines bitcoin as ‘property’
- Nonprofit who accept BTC will issue the receipt in BTC
- Donor has the onus to value the donation in USD
Options for write-offs:
- Typical charitable donation: convert BTC to USD, pay taxes on the gains, and then donate in USD
- Charity that accepts bitcoin: get the write-off, but the majority of charities will immediately convert it to USD
- Donor-advised fund: donate in BTC with the help of a management fund and choose among charities (Fund converts to USD and makes contribution to charity).
- GiveTrack projects and BitGive!
Triple the Benefit with GiveTrack Projects and BitGive:
- Offset capital gains to reduce or eliminate taxes.
- We hold in BTC, so the value keeps growing.
- Any gains we continue to receive are tax free!
LibraTax Can Help:
- Calculate short- & long- term gains across multiple bitcoin accounts
- Donate to offset gains
- Identify the most advantageous coins to donate for the most offset
Go to LibraTax
Tips for Navigating the Process:
- Stay under $5k USD equivalent per BTC donation to avoid the need for an appraisal
- IRS requires an appraisal for donations of property that are valued over $5k
- IRS Form 8283, Section A is required for gifts of property valued over $500
Options to Support BitGive:
PLEASE NOTE: This is not official tax or legal advice. Please consult your tax adviser for information about appropriate filing and record keeping.