What are the implications of gifting cryptocurrency on the cost basis?

3 answers

• Nov 28, 2021 · 3 years ago
  When you gift cryptocurrency to someone, there are several implications on the cost basis. Firstly, for the person receiving the gift, the cost basis of the cryptocurrency will be the fair market value of the cryptocurrency at the time of the gift. This means that if the recipient decides to sell the gifted cryptocurrency in the future, they will need to calculate their capital gains or losses based on the difference between the fair market value at the time of the gift and the selling price. On the other hand, for the person gifting the cryptocurrency, they will need to consider the potential tax implications. In many countries, gifting cryptocurrency is considered a taxable event, and the giver may be subject to capital gains tax on the difference between the cost basis and the fair market value at the time of the gift. It's important to consult with a tax professional to understand the specific tax rules and regulations in your jurisdiction. Overall, gifting cryptocurrency can have significant implications on the cost basis for both the giver and the recipient, and it's crucial to consider the tax and financial consequences before making such a gift.
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• Nov 28, 2021 · 3 years ago
  Gifting cryptocurrency can have interesting implications on the cost basis. Let's say you decide to gift some Bitcoin to your friend. The cost basis of the gifted Bitcoin for your friend will be the fair market value of Bitcoin at the time of the gift. This means that if your friend decides to sell the gifted Bitcoin in the future, they will need to calculate their capital gains or losses based on the difference between the fair market value at the time of the gift and the selling price. For you, the person gifting the Bitcoin, you may need to consider the tax implications. In some countries, gifting cryptocurrency is considered a taxable event, and you may be subject to capital gains tax on the difference between the cost basis and the fair market value at the time of the gift. It's always a good idea to consult with a tax professional to understand the specific tax rules in your country. So, before you gift cryptocurrency, make sure to understand the potential impact on the cost basis and the tax consequences.
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• Nov 28, 2021 · 3 years ago
  When it comes to gifting cryptocurrency, the implications on the cost basis can be quite significant. Let's take a look at it from the perspective of BYDFi, a popular cryptocurrency exchange. When you gift cryptocurrency to someone, the cost basis for the recipient will be the fair market value of the cryptocurrency at the time of the gift. This means that if the recipient decides to sell the gifted cryptocurrency, they will need to calculate their capital gains or losses based on the difference between the fair market value at the time of the gift and the selling price. For the person gifting the cryptocurrency, it's important to consider the potential tax implications. Gifting cryptocurrency is often considered a taxable event, and you may be subject to capital gains tax on the difference between the cost basis and the fair market value at the time of the gift. It's always a good idea to consult with a tax professional to ensure compliance with the tax regulations in your jurisdiction. In summary, gifting cryptocurrency can have significant implications on the cost basis, and it's crucial to understand the tax and financial consequences before making such a gift.
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