Can I Gift Crypto Tax Free?
Yes, you can gift cryptocurrency tax free up to $18,000 per recipient annually under the IRS’s annual gift tax exclusion (for 2024). If the value of your gift exceeds this limit, you may still avoid paying gift tax by utilizing your lifetime exemption, which is $12.92 million. However, you will need to file IRS Form 709 to report the gift if it exceeds the annual limit.
The recipient of your gift is not required to pay tax upon receiving the crypto, but they may need to pay capital gains tax when selling the gifted cryptocurrency based on its appreciated value.
Key Points:
- Annual Exclusion: $18,000 per recipient (2024).
- Lifetime Exemption: $12.92 million (2024), requires filing IRS Form 709 if exceeded.
- Recipient’s Responsibility: No tax on receiving the gift, but capital gains tax may apply when they sell the crypto.
Gifting Crypto Tax Implications
|
Scenario |
Tax Responsibility |
|
Gift under $18,000 (per recipient, 2024) |
No gift tax for the donor or recipient. |
|
Gift exceeding $18,000 |
File IRS Form 709, apply to lifetime exemption. |
|
Recipient sells the gifted cryptocurrency |
Capital gains tax may apply to the recipient. |
Frequently Asked Questions
Is there a tax on receiving gifted cryptocurrency?
No, but capital gains tax may apply if the recipient sells it.
What happens if the crypto gift exceeds $18,000?
You need to file Form 709 and can use your lifetime exemption.
How is the cost basis of gifted crypto determined?
The recipient inherits your original purchase price.
Can I gift crypto to multiple recipients tax free?
Yes, up to $18,000 per recipient annually.
Do I need to report crypto gifts to the IRS?
Only gifts over $18,000 require reporting via Form 709.
Can I gift cryptocurrency without paying taxes?
Yes, up to $18,000 per recipient. For larger gifts, file Form 709.
What is the tax basis of gifted cryptocurrency?
The recipient uses the original purchase price as the cost basis.
