IRS Crypto Donation Rules: What You Can and Can't Deduct in 2025
When you donate cryptocurrency, a digital asset used for peer-to-peer transactions and stored on a blockchain. Also known as digital currency, it is treated by the IRS as property, not cash. That one detail changes everything when you give crypto to a qualified charity. If you donate Bitcoin, Ethereum, or any other token directly—without selling it first—you can deduct the full fair market value on the day you gave it away. And you won’t owe capital gains tax on the appreciation. This is one of the smartest moves in crypto tax planning, but only if you do it right.
The IRS crypto donation rules, official guidelines issued by the U.S. Internal Revenue Service for reporting gifts of digital assets to nonprofit organizations require clear documentation. You need proof of ownership, the date of the donation, and the crypto’s value at that exact time. Platforms like Coinbase or Kraken often generate donation receipts, but if you sent crypto from a self-custody wallet, you must track and save the transaction hash and the USD value from a reliable source like CoinGecko or CoinMarketCap. The charity must be a 501(c)(3) organization. Giving to a church, food bank, or university? Fine. Donating to a random crypto foundation with no IRS status? Not deductible. And never donate to a charity that then turns around and sells your crypto—unless they’re a qualified donee with a written acknowledgment, which you must keep for your records.
What about crypto you bought at $50 and is now worth $5,000? The IRS lets you deduct the $5,000, not your original cost. That’s a huge win. But if you donated crypto you held for less than a year, your deduction is limited to your cost basis, not the current value. Timing matters. Also, don’t confuse donations with swaps. If you trade one crypto for another and then give the new one to charity, you’ve triggered a taxable event. The cleanest path is to give the original asset directly. And if you’re donating over $5,000, you need a qualified appraisal—yes, even for crypto. The crypto tax deduction, the amount you can legally reduce from your taxable income by donating digital assets to approved charities is real, but it’s not automatic. You fill out Form 8283 and attach it to your return. Miss a step, and the IRS can disallow the whole thing.
Some people think they can dodge taxes by sending crypto to a friend who then donates it. That doesn’t work. The IRS looks at the original owner. If you owned it, you’re responsible for the tax consequences. Others try to donate to charities overseas. Nope. Only U.S.-based 501(c)(3)s qualify. And if you’re donating NFTs? Same rules apply. The value is what it was worth on the day you sent it. No guessing. No estimates. No "I thought it was worth..."
Below, you’ll find real-world examples of how people have used these rules to save thousands, avoid audits, and support causes they care about—without getting flagged by the IRS. Some stories are smart. Some are cautionary. All of them are based on actual filings and IRS guidance from 2024 and early 2025. Whether you’re giving $200 or $200,000 in crypto, this collection shows you exactly how to do it right.
