Gifting or Donating Crypto

Giving crypto as a gift does not trigger a taxable event for the person giving it — you don't owe tax on unrealized gains just because you transferred the coins to someone else.

The recipient takes on your cost basis and holding period, so when they eventually sell, they'll owe tax on the full gain from your original purchase price, not just the appreciation since they received it.

Gifting more than $18,000 worth of crypto to any one person in a year (the 2024 annual exclusion) may require you to file a gift tax return, though you typically won't owe gift tax until you've used up your lifetime exemption.

Donating crypto directly to a qualified charity is often the most tax-efficient move — you avoid capital gains tax entirely on the appreciation and can deduct the full fair market value as a charitable contribution, as long as you've held the crypto for more than a year.

Selling the crypto first and donating the cash costs you the capital gains tax on the sale, which is why many donors with highly appreciated crypto give the coin itself rather than converting to cash first.