Donating cryptocurrency to a charity isn’t the same as donating cash or even donating supplies. The difference makes people wonder what goes into the process. Donating crypto is akin to donating stocks to a charity, and as such, you have to take a few specific steps before and after the donation actually takes place.
1) Have Cryptocurrency and a Chosen Charity
When looking to donate cryptocurrency, it stands to reason that you should have some form of cryptocurrency on hand and in a wallet. In addition, you should have a charity in mind.
Make sure they accept the cryptocurrency you have in mind, whether that’s Bitcoin, DogeCoin, or something else. Decide on how much you would like to donate and go to the next step.
2) Get Your Currency Valued by a Professional
Before you can donate your crypto, you need to know its worth. While this wasn’t needed in the past, new regulation in the industry makes professional evaluations a safe option, especially if you want to claim the donation on your taxes to reduce them.
Find a US cryptocurrency certified appraiser that can ensure you’re claiming the correct amount on Form 8283. Make sure they are certified and able to do a proper evaluation.
3) Donate Your Cryptocurrency
The final step to crypto donation is the actual donation. This can be done on a number of platforms which will depend on the charity you’ve chosen. No matter which you choose, make sure it’s trustworthy and will give you a receipt when everything is complete.
After the appraisal, donate your coins as fast as possible to make the appraisal accurate and relevant. Don’t forget to keep receipts and notes on everything in case you’re audited in the future.
Learn More About Cryptocurrency Donation
If you’d like to learn more about how cryptocurrency donation can help you reduce your taxes and the steps you need to take to make sure it’s done correctly, please visit our blog for monthly updates and information about bitcoin and altcoin donation.
Randy Tarpey CPA