Gifts and donations of crypto assets

If you have received or have given a gift of crypto assets you will need to consider the tax implications that can occur.

Giving a gift or donation in crypto

By donating or gifting crypto assets you are essentially disposing of them.  Therefore, donating or gifting crypto assets is a CGT event, similar to any other disposal of an asset.

You will 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.

When donating 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:

• the gifts and donations conditions
• gift types, requirements and valuation rules.

You can only claim a tax deduction for gifts or donations to organisations that have a status as a deductible gift recipient (DGR).  Tax deductions cannot be claimed for social media or crowdfunding platforms unless the recipient of the gift or donation has a DGR status.

Receiving a gift or donation in crypto

There are no CGT implications when receiving crypto assets as a gift.  If you later dispose of or transact with the crypto assets, a CGT event may happen.

Regardless of what you do with your crypto assets, you should always keep records.  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 asset is transferred into your legal name.

For more information go to the ATO website.

Source: www.ato.gov.au