We must admit, it’s pretty cool…we’re now accepting cryptocurrency!
Jan 23, 2022
Feed a hungry child in Israel with CRYPTO!
Besides being cool, there’s another great reason to donate using crypto: it’s one of the best ways to reduce taxes. What unique tax features apply to cryptocurrency donations? Well, a gift of cryptocurrency to a recognized public charity like Yad Ezra V’Shulamit (and also a donation of crypto to us via a donor-advised fund) is not seen by the IRS as a gift of currency or legal tender. For tax purposes, the IRS treats cryptocurrencies as a capital asset or income, depending on whether the cryptocurrency was held for investment purposes or received as a form of compensation (e.g., as a mining reward or income received in the form of cryptocurrency). Further, if the asset was held as an investment for more than one year and you itemize the deduction, you may deduct the fair market value of the gift, up to 30% of your adjusted gross income (AGI), with a five-year carryover.
Even if the cryptocurrency was held as an investment for less than a year, or if you did not hold it for investment (i.e., an ordinary income asset, such as where cryptocurrency was received in exchange for services rendered), and you itemize deductions, you may deduct the lesser of the cost basis or the fair market value at the time of contribution, up to 50% of your AGI, and with a five-year carryover.
That’s a significant benefit for you, the donor!
The world is changing and Yad Ezra V’Shulamit is adapting with it to help the poor of Israel, in more and more ways.