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Abstract

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.

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Gifts of Cash*

Cash donations are straightforward. You can typically deduct cash gifts in full, up to a cap set by the IRS.

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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

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Appraisal & IRS Form 8283*

Appraisals are only required if you’re planning to claim a tax deduction for your donation. The appraisal is needed when you file your taxes for the year in which you made the donation—not at the time of donation or grant.

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When You Need Form 8283

For non-cash charitable contributions, the IRS requires Form 8283 to be filed with your tax return. The requirements vary by donation amount and asset type. See the IRS Form 8283 Instructions for complete details.

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When You Need an Appraisal

A qualified appraisal is required for donations of $5,000 or more of the following asset types:
  • Cryptocurrency (Bitcoin, Ethereum, and other digital assets)
  • Real estate
  • Private equity and other privately-held securities
  • Collectibles (art, antiques, rare items)
  • Vehicles (cars, boats, planes)
  • Other non-publicly traded property

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When You Don’t Need an Appraisal

No appraisal is required for:
  • Publicly traded stocks (can be valued using market prices)
  • Cash (bank transfers, credit card, checks)
Even if an appraisal isn’t required, Form 8283 may still be needed for non-cash donations over $500. Always consult with a tax professional to understand your specific filing requirements.

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Getting an Appraisal

Endaoment does not provide appraisals but recommends contacting qualified appraisers like Charitable Solutions LLC or Stout. Once you have your appraisal documentation, send it to [email protected] for sign-off on Form 8283, which can then be included in your tax filing.

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NFT Donations*

NFT donations are nuanced from a tax perspective. If you’re planning to claim a tax deduction for an NFT donation of $5,000 or more, you’ll need a qualified appraisal when filing your taxes. NFT donations can function in 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. Remember, a qualified appraisal is required for NFT donations of $5,000 or more if you’re claiming a tax deduction. Note that cash, stock, crypto, and other donations generate automatic receipts, but NFT donations do not. For NFT gift substantiation, email us.

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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

Endaoment does not provide tax advice. Please consult with your financial advisor or accountant. Helpful Resources: Endaoment does not offer financial advice. Consult your CPA, financial advisor, or attorney for tax obligation queries. The information in this article is for informational purposes only.