When you gift or donate crypto assets, you are disposing of them. Therefore, donating crypto assets is a CGT event, similar to any other disposal of an asset.
You need to know the value of your crypto assets at the time you gift them to determine whether you make a capital gain or capital loss on the CGT event.
If you donate crypto assets, you need to:
- find out if the receiving organisation or fund is set up to accept crypto assets
- transfer the crypto assets into the recipient's legal name.
To claim a tax deduction for a gift or donation of a crypto asset, it must meet:
You can only claim a tax deduction for gifts or donations to organisations that have a status as a deductible gift recipient (DGR)External Link. You can't claim tax deductions for gifts or donations made to social media or crowdfunding platforms unless the recipient of the gift or donation has DGR status. You can check the DGR status of an organisation at ABN Look-up: Deductible gift recipientsExternal Link.
Generally, you don't pay tax on your capital gains when donating crypto assets to DGRs, if:
- the gift is made under a will (testamentary gifts) – however, you can't claim a tax deduction
- donating under the Cultural Gifts Program
- the crypto assets are personal use crypto assets.
You will need to keep crypto asset transaction records, including the date you give or donate the crypto assets and their market value at the time. You can then work out and report the CGT on your crypto assets.
If you receive crypto assets as a gift, there are no CGT implications at the time you receive them. However, if you later dispose of or transact with the crypto assets, a CGT event may happen.
As an organisation accepting donations in crypto assets you need to check your organisation has the capacity to receive crypto.
Regardless of what you do with your crypto assets, you will need to keep records. Most importantly, from when you receive the crypto assets as a gift, you should keep a record of:
- the date of receipt
- the number and type of crypto received
- the market value at the time of receipt.
You will also need to check that the ownership of the crypto assets is transferred into your legal name.How tax applies to transactions when you gift or donate crypto assets or receive them as a gift.