If a holder of 10 bitcoin, who bought the bitcoin five years ago for $500 each, and now wishes to donate this bitcoin to charity, and bitcoin is now worth $25,000, the total value of the bitcoin held is $250,000. By donating the bitcoin directly, one can claim a fair market value tax deduction of $250,000 for the tax year in which the donation is paid. If one sells cryptocurrency and donates the proceeds to charity, depending on one’s tax bracket, capital gains tax on the amount received in USD could be 15% or higher.
By donating long-held crypto assets that have appreciated in value donate directly to donor-advised funds could bump up the total donated by up to 20%. In the U.S., donor-advised funds can receive crypto donations directly. The fund has employees on the payroll who have the resources and expertise in receiving, processing, and liquidating non-cash assets.
Vitalik donates 50 trillion Shiba Inu
Ethereum co-creator Vitalik Buterin recently donated 10% of his Shiba Inu tokens amounting to over $1B to the India COVID-19 relief fund, launched by Polygon co-founder Sandeep Nailwal. According to Nailwal, the India COVD-19 relief fund converts crypto to fiat currency using an entity in the United Arab Emirates. This entity converts the crypt through various exchanges to a foreign account. The money then comes into Indian non-profits under the provision of the Foreign Contribution (Regulation) Amendment Act (FCRA). The donations are then transferred to Indian vendors who undertake COVID-19 relief operations throughout the country.
Up to $300M in crypto donated to charities annually
Currently, about $300M is donated to nonprofits in cryptocurrency annually. A recent study showed that 94% of crypto buyers are between the ages of 18 and 40. Donating crypto could give young investors a chance to support a cause they care about while reducing their tax burdens. The Giving Block is an example of a nonprofit that enables charities to accept donations directly in bitcoin. Their company assists in the setup of a non-profit crypto-exchange account, provides support to nonprofits and directs crypto donors to the doorstep of nonprofits. An interesting use case for crypto donations is the auctioning off of NFTs, and donating the proceeds to charity. The givers can generate a wallet address using the Giving Block’s widget, and configure it so that non-profits can receive royalties in perpetuity every time an NFT is sold.
What do you think about this subject? Write to us and tell us!
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
