There are large tax advantages to donating crypto. Donors can donate unrealized gains on their cryptocurrencies without getting taxed. Non-profits in return can exchange those assets, and because of their 501(c)3 status, will not be taxed either.

For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of the virtual currency in U.S. dollars as of the date of donation. If a virtual currency is listed on an exchange and the exchange rate is established by market supply and demand, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied. Donors who give cryptocurrency donations to The Salvation Army USA Western Territory will receive an electronic donation receipt (through the Engiven donation platform) in US dollars with comprehensive details about each transaction.

Paid Engiven users are able to take advantage of our automated tax forms. Every time a donation is completed, our system creates the required 8282 form for the non-profit organization. In addition, every time a donor gives a gift valued at more than $5,000, our CPA does an appraisal and generates the required 8283 form for them - saving them both time and money.

Please refer to your own tax professional for your particular and unique circumstances. We do hope this was a helpful primer for understanding how donating and receiving cryptocurrencies work within the US tax system.

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