For crypto investors, giving crypto to your favorite cause is easier than ever before. Donating cryptocurrency to an eligible charity can eliminate your capital gains tax and can reduce your tax bill through the charitable deduction.

The IRS makes a distinction between a donation and a gift for tax purposes depending on who the cryptocurrency was sent to. If you send cryptocurrency to a 501c3 nonprofit, this is considered a donation, also referred to as a charitable contribution. If you send cryptocurrency to family, friends, or a crowdfunding campaign, this is considered a gift.

The IRS (and many international agencies) consider cryptocurrency to be property for tax purpsoes. This means that gifts and donations of property are both non-taxable transactions to the gift giver and the receiver.

Because of this, giving crypto is usually more tax efficient than making a cash donation due to the tax advantaged savings. It is typically most beneficial to donate long-term appreciated capital assets, but there are also large tax benefits to gifting any appreciated assets.

We’re working with TaxBit to further optimize cryptocurrency charitable contributions so that taxpayers can give more and reduce their tax burden. Donate today and sign up with TaxBit to optimize your charitable tax savings.

This guide will explain the tax benefits to donating and gifting cryptocurrency. You can read the full guide from TaxBit here.