How does the IRS treat gifts of crypto?

3 answers

• Dec 16, 2021 · 3 years ago
  When it comes to gifting cryptocurrency, the IRS treats it as a taxable event. This means that both the donor and the recipient may have tax obligations. The donor may need to report the gift as a capital gain or loss, depending on the value of the cryptocurrency at the time of gifting. The recipient, on the other hand, may need to report the gift as income, subject to ordinary income tax rates. It's important to keep accurate records of the value of the cryptocurrency at the time of gifting to ensure compliance with IRS regulations.
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• Dec 16, 2021 · 3 years ago
  Gifting cryptocurrency can be a great way to share the benefits of this digital asset with others. However, it's crucial to understand the tax implications. According to the IRS, cryptocurrency is treated as property for tax purposes. This means that gifting cryptocurrency is similar to gifting stocks or real estate. Both the donor and the recipient need to consider the fair market value of the cryptocurrency at the time of gifting for tax purposes. It's recommended to consult with a tax professional to ensure compliance with IRS regulations and to properly report any tax obligations related to gifting cryptocurrency.
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• Dec 16, 2021 · 3 years ago
  At BYDFi, we understand the importance of staying compliant with IRS regulations when it comes to gifting cryptocurrency. The IRS treats gifts of crypto as taxable events, and it's essential to accurately report and pay any applicable taxes. We recommend consulting with a tax professional to ensure you understand your tax obligations and to help you navigate the complexities of gifting cryptocurrency. Remember to keep detailed records of the value of the cryptocurrency at the time of gifting to ensure accurate reporting. Compliance is key to maintaining a positive relationship with the IRS and avoiding any potential penalties or audits.
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