We partner with Crypto for Charity by FreeWill to help make donating cryptocurrency safe, easy, and tax-efficient. Use the button to donate now!
Donating crypto directly to charity saves you money on two types of taxes:
Avoid paying any capital gains tax (and state income taxes) on your crypto gains.
Second, receive a full federal income tax deduction for the value of your crypto.
An alternative is to sell your crypto and donate the cash proceeds, but you would first owe capital gains tax on the appreciation, resulting in higher taxes for you and less dollars going to furthering the mission of the charity.
The value of your donation will be indicated in the tax receipt, and will correspond to the exchange rate at the moment we converted your gift to US dollars (usually within 10 minutes after receiving your gift).
You donation goes to a 501(c)(3) we partnered with called Crypto for Charity (legal name: Cocatalyst Impact, EIN: 86-1218871) — that’s where your tax receipt will come from. Crypto for Charity liquidates your gift and sends us USD, that we use to support our mission.
The process of claiming a tax deduction for cryptocurrency donations depends on the value of the deduction. If your deduction is for an amount below $500, you can simply report the charitable deduction on your annual income tax return filing. You will have received a donation receipt from Cocatalyst Impact reflecting your gift – save this receipt in your records as support for the deduction you’ve claimed.
To claim a tax deduction for amounts greater than $500, you must file IRS Form 8283 along with your tax return for the year in which your gift was made. Form 8283 is where you will provide the IRS certain details regarding your gift, which help establish your eligibility for the tax deduction.
If you are claiming a deduction for gifts valued above $5,000, you will also need to obtain a qualified appraisal of the donated assets, which establishes their value to the IRS. The appraiser will complete the “Declaration of Appraiser” contained at Part IV of your Form 8283. Next, please send a copy of your partially completed Form 8283 to Cocatalyst Impact, by responding to the email in which we sent you your donation receipt. A representative from our team will then complete the “Donee Acknowledgment” contained at Part V of the form, and send you an updated copy.
You can access Form 8283 and the Instructions for Form 8283 from https://www.irs.gov/forms-pubs/about-form-8283. If you need help completing the form, you should speak with your tax professional.
