Moving coins to a family member and moving coins to a charity look identical in a block explorer and behave nothing alike on a return.

One path hands a basis figure to somebody else and may put a return on the donor's desk. The other path can produce a deduction, but only if the paperwork exists before the transfer, not after.

Start with the recipient: a person or a charity

Decide the recipient type first, because everything downstream splits there. A bona fide lifetime gift to a person moves basis and holding history to that person and may put a Form 709 in front of the donor. A donation to a qualifying charity produces no gain or loss for the donor and may produce a deduction, sized by the amount claimed and backed by whatever Publication 526 requires at that dollar tier.

The table below carries the dated triggers for both paths. Read the dollar figures in the donation rows as the deduction you claim, not as the exchange price on the day you clicked send.

Recipient / path Income at transfer Recipient basis or deduction starting point Responsible filer / document Dated trigger
Present-interest lifetime gift to a person No income to the recipient on receipt of a bona fide gift Recipient takes the donor's adjusted basis; gift-date FMV applies only when a later sale produces a loss Donor files Form 709 when gifts to that recipient exceed the ordinary annual exclusion $19,000 per donor per donee in 2025 and in 2026
Charitable donation, claim over $500 through $5,000 No gain or loss to the donor Donation FMV for long-term property; lesser of basis or FMV for one year or less Donor files Form 8283 Section A, plus contemporaneous written acknowledgment from the charity Over $500 claimed brings Form 8283 into the return
Charitable donation, claim over $5,000 No gain or loss to the donor Same as above, with the claimed amount supported by a qualified appraisal Donor completes Section B; charity signs; appraiser signs Strictly over $5,000 per item or group of similar items, aggregated across charities
Charitable donation, claim over $500,000 No gain or loss to the donor Same as above Donor attaches the qualified appraisal itself to the return Strictly over $500,000 claimed, subject to listed exceptions

Sending the coins is the easy part. The record that travels with them is the part people skip.

Save the basis record before giving crypto away

A recipient of a bona fide gift has no income on receipt (IRC §102). What the recipient does inherit is the donor's adjusted basis under IRC §1015(a), which means the original purchase price and the original acquisition date matter years after the transfer.

If fair market value on the gift date is lower than the donor's basis, that lower value is used specifically to compute a loss, and a sale for proceeds landing between the two figures produces neither gain nor loss.

That middle case is where I see reconciliation go sideways. Somebody records the gift-date price as "the basis," the recipient sells above it, and the gain reported is smaller than the gain the carryover basis actually produces.

Worked dual-basis example (all amounts hypothetical, fees omitted)

Donor's adjusted basis: $10,000. Fair market value on the gift date: $6,000. The recipient later sells:

  • Proceeds $12,000 - gain of $2,000, measured against the donor's $10,000 basis.
  • Proceeds $4,000 - loss of $2,000, measured against the $6,000 gift-date value.
  • Proceeds $8,000 - neither gain nor loss, because the price landed between the two figures.

This is transparent arithmetic to show the mechanic, not a researched transaction or an estimate of anybody's tax.

Gift record checklist - complete before the transfer

Item What to capture
Parties and asset Donor name, recipient name, ticker and exact unit count transferred
Acquisition evidence Original acquisition date, plus the trade confirmations or statements behind it
Donor's adjusted basis $______ (cost plus adjustments, kept separate from any market figure)
Gift-date FMV $______ (price source and timestamp named, kept in its own field)
Year-to-date gifts to this recipient Running total of all gifts to that same person this calendar year
Handoff Copy of the basis record and the transfer confirmation given to the recipient

Two separate spaces for two separate numbers, deliberately. A single "value" field is how the dual-basis rule gets lost. No IRS form requires this checklist, and that is the point: nothing external will prompt you for basis at the moment you send.

When does the donor need to file Form 709?

The annual exclusion is $19,000 per donor per donee in 2025, and $19,000 per donor per donee in 2026 (current figure at the IRS), unchanged between the two years, and it applies to present-interest gifts; future interests are outside it.

Stay at or below that amount for a given recipient and, in the ordinary case, no gift-tax return is due for that recipient.

Go above it and a return becomes the donor's job. Form 709 is filed by the donor, never the recipient, per the IRS instructions for that form. Filing is also not the same thing as paying: amounts above the annual exclusion draw down the donor's separate lifetime basic exclusion rather than automatically producing tax due.

That lifetime amount is large and set by statute, so it moves when Congress moves it. The basic exclusion amount is $13,990,000 per person for 2025 (Rev. Proc. 2024-40) and $15,000,000 for 2026 under Rev. Proc.

2025-32, which implements Public Law 119-21, commonly known as the One, Big, Beautiful Bill Act. Usage accumulates across a lifetime and against the estate, and the recent legislation raised the figure instead of letting the scheduled reduction take effect. The framework sits in IRC §§2503(b), 2010(c)(3) and 2505(a).

So a $40,000 gift of bitcoin to one adult child in 2026 does not create tax at the annual-exclusion stage. It creates a Form 709 and a roughly $21,000 bite out of a $15,000,000 lifetime figure.

Check the appraisal before claiming a crypto donation

Strictly more than $5,000 of claimed deduction, per item or per group of similar items, requires a qualified appraisal and Form 8283 Section B under the 2025 Publication 526.

The grouping rule is the trap: similar items aggregate across donee organizations, so three $2,000 donations of the same coin to three different charities in one year land in the over-$5,000 tier, not in the Section A tier.

Strictly more than $500,000 claimed requires attaching the appraisal itself to the return, subject to the exceptions listed in that publication.

The exception people reach for does not reach crypto.

Publicly traded stock escapes the appraisal requirement; digital assets are not publicly traded securities for Form 8283 Section B purposes unless the asset itself is publicly traded stock or indebtedness.

An asset being listed and quoted on an exchange does not remove the appraisal requirement above $5,000.

IRS Chief Counsel Advice 202302012, released January 13, 2023, works through exactly this. A taxpayer donated crypto with a claimed value of $10,000, valued solely from an exchange quote, and the memorandum concluded a qualified appraisal was still required. That memorandum is nonprecedential and cannot be cited as authority, and the captured document supports only the appraisal holding.

It is still the clearest statement of what the exchange price is not.

A price screenshot proves a price existed. It does not do the job Section B asks an appraiser to sign for.

Work out the donation value and income limit

Holding period sets the ceiling. Property held more than one year is generally deductible at donation fair market value, while property held one year or less limits the deduction to the lesser of basis or FMV.

The broader research description of short-term property as "cost basis regardless of market value" is the looser version; use the precise rule, because when FMV has fallen below basis the lesser figure is the FMV, not the basis.

AGI limits then cap what lands on the return this year. Under the 2025 Publication 526, full-FMV capital-gain property given to a 50%-limit organization is generally subject to 30% of AGI. A donor may elect the 50% limit instead, but the price of that election is reducing the deduction to basis.

Capital-gain property given to a non-50%-limit organization, or given for the use of an organization, carries a 20% limit.

Other noncash contributions to 50%-limit organizations generally use 50% of AGI reduced by cash deducted under the 60% rule, and anything over the limit follows the carryover ordering in that publication.

Note the shape of that last sentence carefully. The 60% cash rule does not compute a crypto deduction; it only reduces the room left for one. Donating appreciated coins never gets the 60% treatment.

Run both versions before you transfer. A donor with a modest AGI and a heavily appreciated position sometimes deducts more over the carryover years at 30% of AGI than by electing down to basis, and sometimes not. That 2025 publication is also not a complete accounting of every 2026 adjustment, so check the current year's figures against it.

Assemble the charity's substantiation packet

Donation preparation list

  1. Confirm the organization qualifies, and confirm which limit category it falls in (50%-limit or not).
  2. Pin the holding period for the exact units being transferred: more than one year, or one year or less.
  3. Pull acquisition records, adjusted basis, and the transfer confirmation showing units and destination address.
  4. Calculate the proposed deduction under the holding-period rule before choosing the tier of paperwork.
  5. Total all similar items donated across every charity this year, then re-check the tier.
  6. Get the contemporaneous written acknowledgment from the charity, covering the donation and any goods or services received.
  7. File Form 8283 when the claim exceeds $500: Section A through $5,000, Section B above it.
  8. Engage a qualified appraiser above $5,000 and get the appraisal before the return goes out.
  9. Complete Section B with the appraiser's signature and the donee organization's signature.
  10. Attach the appraisal itself above $500,000.
  11. Keep appraisal fees in a separate line; they are not deductible as part of the charitable contribution.

This is a preparation aid. It does not reproduce every exception or filing requirement in Publication 526 or the Form 8283 instructions.

The charity's signature is narrower than donors expect. A donee signing Section B acknowledges receipt of the described property; it does not endorse the value you claimed, and no charity is agreeing to defend your number. On the other side, the charity has its own filing: if the donee disposes of the donated asset within three years, Form 8282 comes into play.

Worth knowing before you ask a charity to sign something, because a fast liquidation is normal practice and generates that form.

Also, the $500 line is a Form 8283 entry threshold. It is not a universal cutoff for charity acknowledgments, and staying under it does not mean no documentation.

Finish with a record the next person can use

Two packets, kept apart. The family recipient gets a basis packet: acquisition date, the donor's adjusted basis with its supporting confirmations, gift-date FMV with its price source, and the transfer record. The charitable donation packet stays with the donor: acknowledgment, Form 8283 with signatures, the appraisal where the tier required one, and the fee invoice kept outside the contribution amount.

Reconcile before you hand anything over.

If the coins arrived as rewards rather than a purchase, go back and check the income record for staking rewards to find the amount that established basis, and check the receipt date of an airdropped coin for tokens that showed up without a trade.

Do not stamp a basis figure on a record you cannot support; obtain the underlying evidence instead. For everything around these transfers, explore the digital-asset tax guide index.

Before transferring crypto, choose the gift or donation path, complete its record checklist, and save the basis evidence or appraisal documents with the transfer confirmation.

Sources