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.
Questions?
If you are interested in giving Bitcoin or other cryptocurrency to Northwestern, please contact Northwestern Gift Planning at 800-826-6709 or giftplanning@northwestern.edu. We are happy to walk you through the process.