Resources
Taxability Explainer
Opening a Donor-Advised Fund (DAF) with Endaoment is more than just a charitable endeavor; it’s a strategic financial decision that offers tax efficiency, flexibility, and a modern way to manage your philanthropic goals. By funding a DAF, you can gain immediate tax benefits, as contributions are deductible in the year they are made.
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Understanding the tax implications surrounding donations in various forms is crucial. Here’s a simplified guide to help you navigate taxability related to gifts of stock, cash, crypto, and NFTs. Remember, it’s essential to consult with a tax professional for personalized advice as Endaoment does not provide financial or tax advice.Gifts of Cash*
Cash donations are straightforward. You can typically deduct cash gifts in full, up to a cap set by the IRS.Gifts of Appreciated Assets (Stock, Crypto, Property, etc.)*
When you donate stocks, the tax deduction is based on the fair market value (FMV) of the stocks at the time of donation. If held for over a year, you can potentially deduct the full market value. For stocks held for less than a year, the deduction may be limited to the cost basis.
Donor Fundamentals: Taxability
Appraisal & IRS Form 8283*
For donations exceeding $500 of cryptocurrency to a charity within the tax year, Form 8283 is required alongside your tax return for reporting and deducting. Donations over $5,000 necessitate a qualified appraisal. Endaoment does not provide appraisals but recommends contacting qualified appraisers like Charitable Solutions LLC or Stout. Once appraised, send the documentation to admin@endaoment.org for sign-off on Form 8283, which can then be included in your tax filing.NFT Donations*
NFT donations are nuanced from a tax perspective and always require an appraisal. NFT donations can function a number of different ways. For specific scenarios not outlined here, please reach out! For creators, splitting proceeds at the contract level directly to a nonprofit like Endaoment may result in lower tax obligations. Conversely, receiving assets before donating might create tax liability and extra steps. For NFT holders, the holding duration affects deduction amounts, similar to appreciated asset donations. An appraisal is always required for NFT donations. Note that cash, stock, crypto, and other donations generate automatic receipts, but NFT donations do not. For NFT gift substantiation, email us.Automatic Donation Tagging on CoinTracker
Endaoment has teamed up with CoinTracker to automatically tag your crypto donations to Endaoment. Read more here and we hope this feature makes giving and claiming deductions a bit easier.
Cointracker Automatic Tagging
- CoinTracker - How Crypto Gifts and Donations Are Taxed
- CoinLedger - NFT Tax Guide
- CoinLedger - Reduce Your Tax Bill With Crypto Donations
- TokenTax - NFT Tax Guide
- PlannerDAO - Crypto-Native Financial Planners
- IRS Documentation on Digital Assets