Can I deduct cryptocurrency donations?

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TurboTax Help

Can I deduct cryptocurrency donations?

Cryptocurrency donations are allowed if they're given to a qualified charitable organization. You can ask the donee if they are a qualified organization for charitable purposes or search for them in the IRS Exempt Organizations lookup tool (select Pub 78 data from the Database dropdown, Organization name from the Search by dropdown, then enter the organization's name as your search term).

You're not allowed to deduct cryptocurrency – or any other donation, for that matter – given to a person, a family, or a group that isn't a qualified charitable organization. Also, to deduct donations on your federal taxes, you'll need to take the itemized deduction for anything over $300 for the tax year 2020. You can take up to $300 as deductions in tax year 2020 even if you do not itemize.

The IRS treats virtual currency as property, not cash. This means you'll need to determine the cryptocurrency's fair market value (FMV) on the date of the donation. You can use an online cryptocurrency converter, such as CoinMarketCap, to determine the USD value based on either the closing price or the average price as of the donation date (doesn't matter which one you choose, as long as you stay consistent throughout your calculations.) Keep notes of your calculations with your tax records in case it's ever questioned.

Note: If the FMV of your donation exceeds $5000, you'll most likely need to get a qualified appraisal. Do an online search for "crypto appraisal" to locate appraisers who specialize in virtual currency values for charitable purposes.

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