Bitcoin’s price going up may lead you to sell too quickly and incur high taxes, but if you donate crypto, there could be significant advantages.
You’ve seen the headlines: the price of Bitcoin is quickly approaching the all time highs it reached three years ago. This price surge may make you think about selling in order to lock in your profits if you’re a Bitcoin investor. If you do decide to pull that trigger, you should know that each crypto sale is a taxable event. Any time you sell for a profit, the amount of taxes you’ll owe will go up. Long-term holding can have a lot of benefits for crypto investors across countries.
Fortunately, there’s another way. Instead of handing over money to Uncle Sam, you can donate crypto to a cause of your choice. That’s where our partner The Giving Block comes in. As long as you donate crypto before 2020 ends, you’ll be able to write off your crypto donations and reduce the amount you’ll have to pay on your 2020 tax return.
Donate crypto to offset your crypto gains through charitable giving
Back in 2017, Bitcoin shocked the world when it started selling for 20k. Even more surprising? The last time Bitcoin reached $20,000, the community donated about $100 million worth of crypto to nonprofits in just one month.
This time around, that figure is likely to be even larger. The Giving Block now has partnerships with 120+ charitable organizations and dozens of community partners. That’s 10x growth from last December.
How to see what effect your crypto donation will have
Curious about donating? You can find out what effect your donation with crypto will have by using CoinTracking for free.
First, import all your crypto transactions from your exchanges in the same way that you normally would at the end of the year. We currently offer more than 100 import options. Then, go to the Enter Coins page, insert a new transaction and enter the amount of crypto that you intend to donate. After you do that, tag the transaction as a donation using this drop down menu:
That’s all you have to do. The donation with crypto you entered will automatically be factored into your tax reports. If you need a crypto accountant, check our network of crypto-tax ready firms.
#BitcoinTuesday is upon us
Want to maximize the impact of your crytpo donation? Be sure to donate next Tuesday, the 1st of December. Crypto companies like Gemini, Storj and Flexa are matching donations given to participating nonprofits for the month of December– and if you donate $100 or more, you’ll be automatically entered into a Ledger Nano giveaway.
Pick a cause and donate crypto!
Here are just a few of the most recognizable charity organizations that you can donate to through The Giving Block.
United Way organizes volunteer-led, nonprofit organizations located in geographic communities all over the world. These communities seek to understand and address the root causes of a range of key issues, from hunger to COVID-19 and more.
American Cancer Society
The American Cancer Society’s mission is to free the world from cancer. To accomplish that end, the ACS funds and conducts research, shares expert information, supports patients, and spreads the word about prevention.
Save the Children
Save the Children was the first global movement for children, boldly declaring that children have rights. Today, the charity is the global leader in child health, education and protection.
No Kid Hungry
No Kid Hungry is an American charity that works to end child hunger in the United States by ensuring that all children get the healthy food they need every day to thrive. It funds, forms and researches programs related to school breakfast, summer meals, after school meals and food education.
More donate crypto drives are coming up
As 2020 draws to a close, look for more donation opportunities from The Giving Block. Bitcoin Tuesday kicks off the end of year giving season on December 1, but the rest of the month will continue with the #BagSeason Campaign (Bitcoin Annual Gifts). Check out the participating causes here.
It’s easy to donate with crypto when you use CoinTracking to keep track of your taxes:
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If you need personalized help reviewing your transactions or preparing your US tax returns, check out our CoinTracking Full Service. CT Full Service is provided by a team of crypto tax professionals led by Sharon Yip, an expert CPA. Follow our weekly AMAs on Twitter where Sharon Yip answers your crypto tax questions.
Follow our regular content about crypto taxes:
2021’s NFT guide (with taxes).
Is Bitcoin taxable? The ultimate guide for 2021 taxes.
Tax implications of getting paid in Crypto.
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How to report crypto in your taxes?
Earn Interest on Crypto: The Taxes Guide.
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The best tools to learn about Bitcoin and Crypto.
Tax implications of buying a Tesla with Bitcoin.
Disclaimer: Taxes and donation regulations may vary in different countries. Some countries waive all taxes for those who hold cryptos for a year, while other nations let donations offset crypto taxes in different ways. Be sure to do your own research before you file to find out what’s required.
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