ATO advice on donating crypto assets

Clients need to firstly find out if the not-for-profit organisation is set up to accept crypto assets and then 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 the gifts and donations conditions and gift types, requirements and valuation rules.

When considering the gifts and donations conditions, gift types, requirements and valuation rules, crypto assets are property.

Your client can only claim a tax deduction for gifts or donations to organisations that have a status as a deductible gift recipient (DGR). They 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. Your clients can check the DGR status of an organisation at ABN Lookup: Deductible gift recipients.

Because crypto assets are property, if your clients donate crypto assets there may be capital gains tax (CGT) consequences. Donating crypto assets is a CGT event, similar to any other disposal of an asset.

If CGT applies to a gift of crypto assets, they are received at the market value of the asset at the time of the CGT event.

Generally, your clients don’t have to pay CGT when donating crypto assets to DGRs for:

• Gifts made under a will (testamentary gifts) – but you can’t claim a tax deduction for these
• Property donated under the Cultural Gifts Program
• Personal use assets

Most of your clients will need to report the crypto-asset transaction at both the CGT and the gifts and donations sections of their tax return.

More information about crypto assets is available at tax treatment of crypto assets.