Crypto Tax Basics for Your Donors
While crypto is not the same as cash, every cryptocurrency transaction (such as a sale or exchange) has a tax implication. Current IRS guidelines classify virtual currency as property for federal tax purposes. This means that any tax principles that apply to property transactions will also apply to cryptocurrencies. Want to access the tax code literature? Read the complete IRS guidelines on virtual currency.
Raise Awareness
Get the word out to all crypto HODLers that their tax incentives for donating crypto are unmatched with the example language below as well as resources to send to donors:
How does a crypto holder minimize their crypto tax burden?
Donate to charity.
Crypto donations are not subject to capital gains tax and are also tax-deductible, similar to donations of appreciated stock. In essence, giving away a portion of crypto to a nonprofit can help offset the capital gains a crypto holder has incurred during the year.
Use the following drafts to get the word out to your donors:
Newsletter Blurb
We're excited to share <ORGANIZATION NAME> is creating more impact through innovation this year. In order to increase our mission's reach, we now accept donations in Bitcoin, Ethereum, and dozens of additional leading cryptocurrencies. Help us celebrate this advancement by donating a crypto gift today <LINK TO DONATION PAGE HERE>.
Email Blurb Announcement
Subject Line - Elevate Your Impact: Donate Cryptocurrency & Enjoy Tax Benefits ??
Dear [First Name],
We are thrilled to announce that <ORGANIZATION NAME> is now accepting cryptocurrency donations! Did you know that donating cryptocurrency is a non-taxable event? This means you can support our cause while enjoying unmatched tax benefits.
When you donate Bitcoin or other cryptocurrencies, you do not owe capital gains tax on the appreciated amount and can deduct it on your taxes. It's one of the most tax-efficient ways to make a difference!
If you're interested in learning more about how donating crypto can lower your taxes, please consult with a crypto-savvy tax professional. You can also check out The Giving Block who partners with our organization for more information.
Join us in celebrating this exciting new venture in crypto philanthropy! Visit <LINK TO DONATION PAGE> to make a donation and make an even greater impact.
Thank you for your continued support.
[YOUR NAME/SIGNATURE]
Get more resources on cryptocurrency and taxes: