Nonprofit Resources
IRS Provides Clarification on the Qualified Appraisal Requirement for Cryptocurrency Contributions
The IRS recently provided clarification about the qualified appraisal requirement for charitable contributions of cryptocurrency in a memorandum from the Office of the Chief Counsel of the Internal Revenue Service. The key takeaway is that although cryptocurrency may be traded on an exchange with readily available market quotations, the IRS’s position is that cryptocurrency is not a security.
Therefore, while publicly traded securities are generally exempt from the qualified appraisal rule because they are traded on an exchange with readily available market quotations, this exemption does not apply to cryptocurrency. This leads to the conclusion that gifts of cryptocurrency must be substantiated by a qualified appraisal.
For cryptocurrency contributions valued at more than $5,000, the donor must receive a qualified appraisal prepared by a qualified appraiser to substantiate the valuation and the organization receiving the donation must sign Form 8283.
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Ted R. Batson, Jr.
A certified public accountant and licensed attorney, Ted advises exempt organizations of all sizes on a wide range of tax matters, including representation before state and federal tax authorities and assistance with firm audit* or advisory engagements to formulate advice and counsel on important operating and tax issues. In addition to tax advisory services, Ted leads the firm’s tax preparation practice, including IRS Forms 990 and 990-T and related state forms. He also serves on the Church Law & Tax Senior Editorial Advisory Board and is a member of the Missio Nexus Mission Finance and Administration Planning Committee. Note: Although licensed to practice law in Indiana, Ted's services through CapinCrouse do not involve the practice of law and consequently do not result in the creation of an attorney-client relationship.