How does the IRS treat cryptocurrency gifts in terms of taxes?

3 answers

• prabhakar TiwaryMay 14, 2024 · a year ago
  When it comes to cryptocurrency gifts, the IRS treats them as property rather than currency. This means that the fair market value of the cryptocurrency at the time of the gift will determine the tax implications. If the value of the gift exceeds the annual gift tax exclusion limit, the donor may be required to file a gift tax return. As for the recipient, they generally do not have to report the gift as income. However, if they later sell or exchange the gifted cryptocurrency, they may be subject to capital gains tax. It's always a good idea to consult with a tax professional to ensure compliance with IRS regulations.
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• Benjamin JosephMay 21, 2022 · 3 years ago
  Ah, the IRS and cryptocurrency gifts, a topic that can be quite confusing. Here's the deal: the IRS treats cryptocurrency as property, not money. So, when you give or receive cryptocurrency as a gift, it's like giving or receiving a piece of property. The tax implications come into play when the value of the gift exceeds a certain limit. If that happens, the donor might need to file a gift tax return. As for the recipient, they generally don't have to report the gift as income. However, if they decide to sell or exchange the gifted cryptocurrency later on, they might have to pay capital gains tax. It's always a good idea to consult with a tax professional to make sure you're on the right side of the IRS.
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• Eric in North HollywoodJun 19, 2022 · 3 years ago
  When it comes to cryptocurrency gifts and taxes, the IRS has specific rules in place. According to the IRS, cryptocurrency is treated as property, not currency. This means that if you give or receive cryptocurrency as a gift, the fair market value of the cryptocurrency at the time of the gift will determine the tax implications. If the value of the gift exceeds the annual gift tax exclusion limit, the donor may be required to file a gift tax return. As for the recipient, they generally do not have to report the gift as income. However, if they decide to sell or exchange the gifted cryptocurrency in the future, they may be subject to capital gains tax. It's important to consult with a tax professional to ensure compliance with IRS regulations and to understand the specific tax implications of cryptocurrency gifts.
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