Be Charitable With Cryptocurrency
Despite recent market volatility, Bitcoin and other virtual currencies have been among the best-performing assets over the past five to ten years. If you own cryptocurrency—especially if you bought it at a low cost basis—it is important to evaluate the tax implications of converting it to cash. One option you may consider is donating your cryptocurrency to Northwestern or another non-profit organization.
What Are My Tax Benefits?
When you make a gift of cryptocurrency, you may qualify for an income tax deduction of the gift’s fair market value, up to 30 percent of your adjusted gross income (AGI) with a five-year carryover. If you have held your cryptocurrency for more than a year, you may also avoid the capital gains tax you would have paid if you sold it.
How to Make Your Gift
Step 1: Contact the non-profit organization you would like to support to confirm that it accepts cryptocurrency gifts. Northwestern accepts the following cryptocurrencies:
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Ethereum (ETH)
- Wrapped Bitcoin (WBTC)
- Dogecoin (DOGE)
- Litecoin (LTC)
- Shiba Inu Coin (SHIB)
- 5 USD-pegged stablecoins (GUSD, USDC, USDP, DAI, and BUSD)
Step 2: Transfer the cryptocurrency via the organization’s online wallet tool. You can donate cryptocurrency to Northwestern using this form.
When to Consider a Gift of Cryptocurrency
Donating cryptocurrency may be right for you if:
- You would like to receive a federal income tax deduction in the year you make your gift.
- You would like to avoid capital gains tax.
- You would like to make an impact at Northwestern.
If you are interested in giving Bitcoin or other cryptocurrency to Northwestern, please contact Northwestern Gift Planning at 800-826-6709 or firstname.lastname@example.org. We are happy to walk you through the process.
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.
Northwestern does not offer charitable gift annuities in all states, so please contact us to determine eligibility.