How does the IRS treat cryptocurrency gifts for tax purposes?

3 answers

• Nov 25, 2021 · 3 years ago
  When it comes to gifting cryptocurrency, the IRS treats it as a taxable event. This means that both the giver and the recipient may have tax obligations. The value of the gifted cryptocurrency is subject to gift tax rules, and the giver may need to file a gift tax return if the value exceeds the annual exclusion amount. Additionally, if the recipient decides to sell the gifted cryptocurrency, they may be subject to capital gains tax based on the difference between the fair market value at the time of the gift and the selling price. It's important to consult with a tax professional to ensure compliance with IRS regulations.
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• Nov 25, 2021 · 3 years ago
  Gifting cryptocurrency can be a great way to share the benefits of digital assets with loved ones. However, it's crucial to understand the tax implications involved. According to the IRS, cryptocurrency gifts are considered taxable events. This means that the giver may be responsible for reporting the gift and potentially paying gift taxes if the value exceeds the annual exclusion amount. On the other hand, the recipient may need to report the gifted cryptocurrency as income and pay taxes accordingly. It's advisable to consult with a tax advisor to navigate the complexities of cryptocurrency gifting and ensure compliance with IRS regulations.
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• Nov 25, 2021 · 3 years ago
  At BYDFi, we understand the importance of staying compliant with IRS regulations when it comes to cryptocurrency gifts. The IRS treats cryptocurrency gifts as taxable events, meaning that both the giver and the recipient may have tax obligations. Givers should be aware of the gift tax rules and consider filing a gift tax return if the value of the gifted cryptocurrency exceeds the annual exclusion amount. Recipients should also be mindful of potential capital gains tax if they decide to sell the gifted cryptocurrency. It's always a good idea to consult with a tax professional to ensure proper compliance and minimize any tax liabilities.
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