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Crypto Donations Require an Appraisal

  • 1.  Crypto Donations Require an Appraisal

    Posted 5 days ago
      |   view attached
    In a January 10, 2023, Office of Chief Counsel IRS Memorandum, the IRS confirmed that donors of cryptocurrency donations of $5,000+ must obtain a qualified appraisal.

    This attached memorandum reaffirms the IRS stance on treating cryptocurrency as "property," requiring the submission of an 8283.

    Different from security gifts that are reported in Section A of the 8283 (which does not require appraisals), cryptocurrency must be reported in Section B, which does.

    In learning this, I also discovered that the IRS issued a new 8283 form (and separate instructions) for use in filing 2022 returns in December. If, for any reason, you provided copies of the older 8283 to donors (not something we should ever do - just remind donors they might need one!), you will now need to inform those donors you gave them the "wrong" form.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987

    Attachment(s)

    pdf
    IRS Memorandum 202302012.pdf   112 KB 1 version


  • 2.  RE: Crypto Donations Require an Appraisal

    Posted 5 days ago

    Thanks for this. Not the direction I would like to see this head in but have to give the IRS credit for using a good illustration for what will be the most common follow-up question regarding what does/doesn't qualify as an appraisal. In my opinion, this combined with the admin cost involved with filing 8282s when disposing of the crypto is a good reason to have a decent minimum gift size.

     

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     






  • 3.  RE: Crypto Donations Require an Appraisal

    Posted 5 days ago
    The cost for a cryptocurrency appraisal is in free-fall. You can get appraisals for major coins for $100 these days. Engiven, a crypto donation platform, is doing free appraisals for donors giving $5k+ to charity, and they automatically produce both an 8282 for the nonprofit and an 8283 for the donor. I don't see appraisals standing up as a long-term source of friction.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:







  • 4.  RE: Crypto Donations Require an Appraisal

    Posted 5 days ago

    Thank you Isaac. That is good information to know.

     

    John Smilde

    Director of Gifts and Records Administration

    Advancement and Alumni Relations

    George Mason University

    4400 University Drive, MSN 1A3

    Fairfax, VA 22030

    703.993.8680

    jsmilde@gmu.edu

     

    This electronic message contains confidential information which is, in whole or in part,

    subject to exclusion from disclosure under the Freedom of Information Act pursuant to

    §2.2-3705.4.7. of the Code of Virginia.

     

     

     






  • 5.  RE: Crypto Donations Require an Appraisal

    Posted 5 days ago
    I agree that the appraisal requirement shouldn't be a problem - more of a nuisance (for our donors). However, I believe many donors are unaware of the 8283 requirement - or the need for an appraisal. These IRS interpretations also strengthen the argument for omitting valuations on our receipts (as is true for all property donations, including securities).

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987