Crypto donations are a great way for investors to reduce their crypto taxes before the end of the year!
Not sure about it?
Let’s cover how donations can reduce your crypto taxes in the US and how you can easily do it through The Giving Block.
KEY TAKEAWAYS about Crypto Donations and Taxes in the US
- It is legal to donate cryptocurrencies to charitable organizations in the US, with clear tax advantages.
- You can deduct the amount of crypto donated to a qualified charitable organization in your capital gains taxes.
- You can deduct the Fair Market Value (in USD) of your donated crypto, even if it’s higher than its original cost basis, if you held it for over 1 year before donating.
- The Giving Block makes it easy for you to choose the donations you want to support while integrating with CoinTracking to make tax filing easy.
How Do Crypto Donations Work?
In the US, you or any organization can donate digital assets to qualified charities and support a meaningful cause. Currently, the easiest way to find charities that accept cryptocurrencies as a donation and transfer funds securely is through The Giving Block, the leading crypto fundraising platform.
You can choose from thousands of charities on the platform and easily donate the amount of cryptocurrencies you wish.
If you’re a nonprofit, you can also work with The Giving Block to simplify the process of accepting cryptocurrencies as a donation.
Your Crypto Portfolio Manager
The Tax Advantage of Donating Crypto
Here it is: reducing your capital gains taxes.
How?
When you sell crypto, you need to calculate the capital gains/loss you had on each trade. This is easily done by deducting the cost basis from the sales proceeds. The cost basis is how much it cost to acquire that amount of crypto and the sales proceeds are how much you received from the sale.
If you have a capital gain, you may be subject to a tax rate ranging from 0% to 37% in the US.
So, what happens if you donate crypto instead of selling it?
Instead of paying capital gains taxes, you can deduct the donated amount of crypto and therefore lower your capital gains while effectively saving on your taxes.
Why Donate Crypto Instead of Cash?
It wouldn't make sense for you to sell your crypto for US dollars (e.g., cash) and then donate the proceeds as you would lose the chance to lower your capital gains taxes.
How Much Can I Deduct From My Crypto Donation?
The tax deduction from your crypto donations will depend on how long you have held that crypto before donating it. Here’s the rule:
- If you held for over one year, you could deduct the market value of that crypto when you donated instead of its cost basis.
- If you held for less than one year, you would have to deduct the smallest value between the current market value and the initial cost basis (Fair Market Value when you bought it).
Quick example:
- You bought 1 Bitcoin (BTC) at $50K on Date X
- After 6 months (Date Y), you want to donate 1 Bitcoin
- At Date Y, 1 BTC is worth $60K
- Your tax-deductible amount is $50K
Why? Since you held that BTC for less than one year, you can only deduct $50K since that’s the lowest value between the cost basis ($50K) and the current value of that crypto ($60K).
Can I Donate any Type of Cryptocurrency?
Yes, you can choose any cryptocurrency you’d like to donate, from Bitcoin to your favorite altcoin.
Creating a Crypto Tax Return Made Easy
How to Donate Crypto with The Giving Block
Here are the simple steps to donate your cryptocurrencies through The Giving Block:
- Choose which asset (e.g., crypto, stocks) you want to donate
- Donate until the end of the year
- Choose the charity - 501(c)3 organization - you want to donate to
- Select the amount of crypto based on its value in US dollars
- Record the transactions and file IRS Form 8283 with the help of CoinTracking
How to Report Your Crypto Donation?
The first step to report your crypto donations is to keep proper records of all of your transactions throughout the year.
To do so, the easiest way is to frequently (more than once a month) track your crypto transactions and calculate your capital gains/income automatically with a crypto tax tool.
By using The Giving Block and CoinTracking, you can determine the Fair Market Value (FMV) of your donations each year and can include that information in the correct tax forms: IRS Form 8283 (Noncash Charitable Contributions) for crypto donations that cross $500 in value.
Top Ways to Reduce your Crypto Taxes by Year-End
You can still take a few actions that can significantly impact your crypto taxes in 2026. Here are the best ways to still lower your crypto tax bill:
Crypto Tax Loss Harvesting
Do you have any crypto that lost its value significantly? Has it dropped more than 80–90% in value? If that’s the case and you believe that the chance of that investment recovering to a non-loss area is quite low, you could consider closing the position (crypto tax loss harvesting) before the end of 2025. Why? If you have other capital gains from your crypto/stock investment, you may benefit more from taking the loss on that trade and use it to offset other capital gains.
Crypto Wash Sale Rule
If you want to have more losses in the books so you can lower your crypto taxes but still keep investing in the same assets, you can sell them and buy them back within 30 days since the wash sale rule still doesn’t apply to digital assets.
Redirect Crypto to Retirement Accounts
In the US, you can hold crypto assets inside retirement accounts that offer tax benefits like a Bitcoin IRA or ROTH IRA. You can still do this by the end of 2025, but the benefits will only be visible later.
Top Ways to Lower Your Crypto Taxes
You can lower your crypto taxes even more if you plan ahead and take calculated steps before triggering any taxable event. Let’s cover the best ways to reduce your crypto taxes in 2026 (that require a bit more planning):
Hold Crypto for Over 12 Months
The easiest way to lower your capital gains taxes in the US is to hold any of your crypto for at least 12 months before selling it. Why? This is how you can be taxed at a long-term capital gain tax rate (e.g., 20%) instead of a short-term (e.g., 37%), effectively paying less in capital gains taxes.
Get Crypto Loans
Proceeds from taking crypto loans are not subject to income tax in the US, while interest may be tax deductible if it is used for investment purposes and not personal use. Please talk to an advisor before taking this route, as you are incurring debt and need to make sure the interest is deductible based on how the funds were spent.
Move to a Income Tax-Free State
Several US states (e.g., Florida, Texas, Nevada) don’t charge state income taxes for residents, effectively reducing your overall tax expense while others (e.g., California) are not so advantageous.
Move to a Crypto Tax-Friendly Country
The last way (and more drastic) is to find a country to move for tax purposes that doesn’t target cryptocurrencies or offers very low tax rates for gains and income. The top crypto tax friendly countries right now include Portugal, El Salvador, Puerto Rico, Malta, Dubai, Georgia, Malaysia, Bulgaria, Slovenia, Slovakia, Switzerland, and Germany.
Last Tip: Work with Tax Professionals and Tools!
The best way to be prepared for taxes and be able to save is to consistently keep accurate records and track your crypto activities regularly. Consider working with a crypto tax professional and using a crypto portfolio tracker that makes the process easier.
Frequently asked questions about crypto donations
Are crypto donations taxable?
No, donating crypto is not a taxable event in the US and can even be tax deductible if you follow certain requirements.
Are crypto donations tax deductible?
Yes, donating crypto to a qualified charitable organization enables you to take an itemized tax deduction.
How to accept crypto donations?
As a charity or another type of organization, you can accept crypto donations through a fundraising tool like The Giving Block.
Conclusion about Crypto Donations
Crypto donations are a powerful way to reduce your crypto taxes in the US, while supporting a good cause.
Crypto donations are tax deductible in the US, but you still have to follow some reporting requirements, which you can do by donating through platforms like The Giving Block that integrate with crypto tax calculators, such as CoinTracking.
Are you ready to start donating? It's simple: Select the charity you want to help, donate your crypto, and file your tax report with that donation to enjoy your deduction.
Disclaimer
The information provided in this article is for educational and informational purposes only. It is not intended as financial, investment, tax, or legal advice. Cryptocurrency investments are highly volatile and carry significant risks. Before investing in cryptocurrencies, conduct thorough research, consult with a financial advisor, and ensure you understand the risks involved. The author and publisher are not responsible for any financial losses or damages that may occur from following the information presented in this article. Always use caution and make informed decisions when dealing with cryptocurrencies.
