Tax Tip #302

It is easy to determine the tax deduction (before limitations) for donating cash to charity. If you donate $100 (and no goods or services have been provided to you), your tax deduction is $100. If you donate clothes to charity where the cost of the clothes is $1,000 and the Fair Market Value (FMV) is $250, your tax deduction is $250. What is your tax deduction if you donate cryptocurrency to charity? 

Example: Monica purchased bitcoin on 9/9/2024 for $750 and donated it to charity on 4/8/2025 when the FMV was $3,923. The tax deduction is $750. If Monica held the cryptocurrency for a year or longer and then donated it, the tax deduction would have been the FMV. 

Considering donating cryptocurrency? Reach out to a team member to learn how to maximize the tax benefit.