Tax Deductions for Crypto Donations in 2025

Is donating crypto a taxable event?

Donating cryptocurrency directly to a qualified charity is not considered a taxable event. In other words, you can often bypass capital gains taxes on coins or tokens that have appreciated in value.

Before deciding whether to donate crypto to charity, consider whether itemizing your deductions makes sense. The 2024/2025 standard deductions are:

• Single filers: $14,600/ $15,000

• Married filing jointly: $29,200/$30,000

• Head of household: $21,900/$22,500

If your charitable contributions and other deductions (e.g. mortgage and taxes) exceed these amounts, itemizing could lower your overall tax bill.

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How do crypto tax deductions work?

When you donate crypto to a tax-exempt organization and meet the relevant IRS criteria, you can claim a deduction for your donation’s fair market value (FMV), which can significantly lower your taxable income.

To qualify for the deduction based on FMV rather than cost basis, you should have held the cryptocurrency for over a year before donating. Donating tokens or coins you’ve held for less than a year limits your deduction to the purchase price (or cost basis).

Lower your tax bills by donating cryptocurrency

If you transfer cryptocurrency directly to a recognized charity (rather than selling it first), the donation is not subject to capital gains taxes. Plus, you can often deduct its FMV from your gross income.

For instance, if you originally bought BTC at $15,000 and donated it when it was worth $20,000, you could avoid paying capital gains on the $5,000 appreciation and potentially deduct $20,000 from your taxable income (subject to IRS limits).

Keep in mind:

• The deduction is usually limited to 30-50% of your adjusted gross income, depending on the organization type.

• You must itemize deductions on your tax return to claim crypto donation deductions.

• The org you donate to needs to be a qualified tax-exempt organization.

Managing crypto donations

Holding onto your crypto for over a year before donating can maximize your tax benefits. If you donate assets held for less than a year:

By waiting until you’ve held the cryptocurrency long-term, you can typically deduct the FMV rather than your initial purchase price.

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How do I report crypto donations on my taxes?

The IRS has different reporting and documentation rules depending on the size of your crypto donations. Regardless of how much you donate, you must itemize deductions on Schedule A of Form 1040 to claim any charitable deduction.

Crypto donations up to $5000

• Report on Form 8283 Part A & 1040 Schedule A.

• Obtain a contemporaneous acknowledgment in writing from the charity describing your donation and confirming what (if anything) you received in exchange.

• The receipt from the organization should include: name/address, the donation date, and fair market value (FMV)

Crypto donations over $5,000

• Report on Form 1040 Schedule A, Form 8283 (Section B).

• Must include a qualified appraisal of the donation’s value.

• Consulting a professional tax advisor is recommended, especially for NFT or high-value donations.

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Appraising the value of a crypto donation

The IRS requires a qualified appraisal when donating over $5,000 in cryptocurrency. While standard exchange-traded coins are typically appraised at their spot value, any donation above $5,000 still needs a professional sign-off.

Exchange-traded coins

If the asset is worth less than $5,000, you can simply use the spot price at the time of donation to determine FMV. Over $5,000, an appraiser must verify the valuation.

Donating NFTs

NFT donations are not taxable events if you transfer them directly to a recognized tax-exempt organization. However, proceeds from an NFT auction are typically taxable, even if the funds end up being donated.

Because there is no single, standardized appraisal method for NFTs, you may need a specialized appraisal or consult a crypto tax professional to ensure compliance.

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When should you donate crypto to get the best tax benefits?

Timing matters. If you donate your crypto after it has significantly appreciated and held it for over a year, you can maximize the potential write-off. Generally:

• High appreciation: More gains you can avoid paying taxes on.

• Long-term holding: The ability to deduct fair market value instead of cost basis.

• Strategic timing: Making your donation in a year when you plan to itemize ensures you can claim the deduction.

Should I donate cash or cryptocurrency?

Donating cryptocurrency often provides more tax benefits than donating cash because you avoid capital gains taxes on any appreciated crypto. However, cash may be more straightforward if a charity does not accept digital assets or if you prefer simpler record-keeping.

Still, if you are a crypto donor who wants the most beneficial outcome, ask the charity if they can accept crypto (or use a service like The Giving Block or Endaoment). Always consult a tax professional if you are unsure.

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Can crypto donations reduce my tax bill?

Yes. When you donate directly to a qualified t nonprofit, you can bypass capital gains on the donated assets and take a charitable deduction (if you itemize). This twofold benefit can save you a substantial amount on your tax return.

Learn more about how to reduce your crypto taxes.