IRS updates crypto donation tax rules: Deductions now require stricter documentation

The Internal Revenue Service (IRS) treats cryptocurrency as property, not cash, for the purposes of charitable donations in the United States. This means that when taxpayers donate digital assets to charity, the contribution is considered a noncash gift and is subject to specific rules for qualification and valuation. For a crypto donation to be eligible for a federal tax deduction, it must be given to a qualified organization recognized by the IRS. Direct donations made to individuals, even if they are in need, do not qualify for a charitable deduction under federal law. The deduction amount for donated cryptocurrency typically depends on how long the asset was held.

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