Charity is now the best way to use your crypto
Cryptocurrency has become one of the easiest ways to donate to charity without the funds being funneled to third parties.
Charity organizations have rare opportunity to boost their donations with cryptos. All because of tax regulation in the United States.
More and more firms are appearing in the USA, the main focus of which are cryptocurrencies, i.e. its mining, sale and purchase. That is why taxation issues are more popular than ever. The Internal Revenue Service (IRS) has some interesting regulations regarding taxation of cryptocurrency donations.
The document, which regulates the taxation of operations with crypt currency, is presented in the Resolution on income from 09.10.2019. This is the first legislative act — a guide to obligations in virtual currency. An important section in it concerns charity contributions in virtual currency. More precisely, the rules for identifying the tax base for operations with cryptocurrency.
In order to qualify for a tax deduction, the Regulations specify the following rules:
- The party that has made a contribution of more than 250 000 dollars of crypto, to fulfill its tax obligations must receive a written confirmation from the charity;
- If the donor tries to refund the tax deduction in the amount of more than 5000 USD, the charitable organization must fill in the form 8283 “Charity contributions by cashless settlement”.
These documents must have the official signature of the authorized persons of the charity organization, which is the official confirmation of the virtual currency transfer, in the form of a donation to the organization’s account.
The rules introduced by the IRS, which apply to donations in cryptocurrency, will lower your taxes. You can make sure you keep the same amount of crypto in your portfolio. If you already donate using a credit card or other method, there is an opportunity for tax arbitrage.
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