Current appraisal requirements unnecessarily burden cryptocurrency donors. Simpler requirements will help donors and charities, and keep philanthropy’s future bright.
A few months ago, Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Finance Committee Ranking Member Mike Crapo (R-Idaho) published an open letter seeking input from stakeholders in an effort to address uncertainties surrounding the tax treatment of digital assets.
Most would agree that charity is a key pillar of a healthy society. As charitable giving evolves, its regulations and rules should accommodate the ease of giving, whether in cash, digital or other assets.
We believe, with crypto playing a growing role in modern philanthropy, that the present appraisal rules for charitable contributions of crypto (under IRC Section 170) present an onerous burden to donors, charities and the IRS, and should be modified so crypto can be easily valued just like donated stocks are valued today.
In collaboration with our colleagues at Save the Children and Mercy Corps, both internationally recognized charitable organizations, we submitted a response to this open letter on September 8, 2023.
You can find a complete copy of the letter below.
- The growing crypto community is highly generous, but current reporting rules for charitable donations of these assets are unnecessary and burdensome for donors.
- We support making several modifications to the appraisal rules for charitable contributions of crypto under IRC Section 170, most importantly, so that donors can calculate the value of donated cryptocurrency just as stocks are valued today, without needing to hire a qualified appraisal for any donation over $5,000 in value.
- This solution would make it significantly easier for donors to claim a deduction for their donations of cryptocurrencies, reduce the burden on the IRS to verify the value of these donations, and provide less friction for charitable organizations to accept cryptocurrency donations.
You can read or download the complete text of our letter here:
Over the past five years, we have processed more than $125 Million in crypto donations and have enabled thousands of charitable organizations to fundraise cryptocurrency. These indicators suggest that interest in crypto philanthropy is strong among donors and nonprofits.
But despite a growing interest in crypto charitable giving, we face a challenge that we cannot solve alone. That is why we have raised our voices to urge the Senate Finance Committee to exempt cryptocurrencies from the appraisal rules.
By doing so, crypto donors will be empowered to further raise levels of charitable giving and help the more than 1.8 million nonprofit organizations across the United States fulfill their missions.
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