Form 8283 requires an appraisal for donations valued at more than $5000. Since noone can meet the IRS qualified appraisal requirements, what are donors doing for this section?
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The donation of cryptocurrency is considered a 'noncash' donation. Here is your answer from the IRS FAQs for Virtual Currency.
Bottom line is that you must have an appraisal. That being said, here is some information that may help. A qualified appraiser is an individual who has earned an appraisal designation from a recognized professional appraiser organization for demonstrating the competency necessary to value the type of property being appraised, or that has met certain minimum education and experience requirements. It cannot be the donor or the charitable organization. Search the web for an appraiser who does virtual currency or simply noncash valuations for charitable organization.
Q35. How do I calculate my charitable contribution deduction when I donate virtual currency?
A35. Your charitable contribution deduction is generally equal to the fair market value of the virtual currency at the time of the donation if you have held the virtual currency for more than one year. If you have held the virtual currency for one year or less at the time of the donation, your deduction is the lesser of your basis in the virtual currency or the virtual currency’s fair market value at the time of the contribution. For more information on charitable contribution deductions, see Publication 526, Charitable Contributions.
Q36. When my charitable organization accepts virtual currency donations, what are my donor acknowledgement responsibilities?
A36.A charitable organization can assist a donor by providing the contemporaneous written acknowledgment that the donor must obtain if claiming a deduction of $250 or more for the virtual currency donation. See Publication 1771, Charitable Contributions Substantiation and Disclosure Requirements for more information.
A charitable organization is generally required to sign the donor’s Form 8283, Noncash Charitable Contributions, acknowledging receipt of charitable deduction property if the donor is claiming a deduction of more than $5,000 and if the donor presents the Form 8283 to the organization for signature to substantiate the tax deduction. The signature of the donee on Form 8283 does not represent concurrence in the appraised value of the contributed property. The signature represents acknowledgement of receipt of the property described in Form 8283 on the date specified and that the donee understands the information reporting requirements imposed by section 6050L on dispositions of the donated property (see discussion of Form 8282 in FAQ 36).
Q37. When my charitable organization accepts virtual currency donations, what are my IRS reporting requirements?
A37. Charitable organization that receives virtual currency should treat the donation as a noncash contribution. See Publication 526 (link above).
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