Cryptocurrency. When might you need an appraisal?

It may come as a surprise, but if you claim a deduction for donating over $5,000 worth of cryptocurrency, you will need to obtain an appraisal.

The IRS treats virtual currency such as cryptocurrencies as property and therefore general tax principles that apply to property apply to transactions using virtual currency. When donating property, or in this case cryptocurrency, you generally will need an appraisal if you claim a deduction on a donation of property of more than $5,000. There are some exceptions, but cryptocurrencies are not listed as an exemption.

This means that in order to claim a charitable deduction on your taxes for donating more than $5,000 in cryptocurrencies, you will need to obtain a qualified appraisal signed and dated by an IRS-approved appraiser.

You can find more information about appraisals, including which forms are necessary to file for a charitable deduction, in IRS Publication 561, Determining the Value of Donated Property.

Please reach out to [e-mail] if you need help connecting with a qualified cryptocurrency appraiser and to have the cost of the appraisal covered by The Giving Block.

Overflow does not provide tax, legal, compliance, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, compliance, or accounting advice. Your organization should consult its own tax, legal, compliance, and accounting advisors before sending or concluding any transaction, communication, or otherwise.