3.4 C
New York
Wednesday, January 25, 2023

Certified Appraisal Requirement for Crypto Donations

The Inner Income Service, in Chief Counsel Recommendation Memorandum 202302102 launched on Jan. 10, 2023, confirmed that taxpayers should substantiate the worth of cryptocurrency donations over $5,000 with a certified appraisal.

The IRS acknowledged that cryptocurrency—which is handled as property, not money—doesn’t fall into any of the statutory exceptions to the appraisal requirement. Exceptions embody money, publicly traded securities or different property laid out in Inner Income Code Part 170 and the laws.

The IRS additionally affirmed that taxpayers received’t be capable of depend on a cryptocurrency alternate to assist the worth of a present for federal earnings tax deduction functions. Additional, the so-called “affordable trigger” exception—which taxpayers use once they argue good religion compliance with the necessities of Treasury Rules Part 170(f)(11)(A)(ii)(II)—received’t excuse noncompliance with the certified appraisal requirement.

IRS memoranda aren’t for use or cited as precedent. Nonetheless, these memoranda put taxpayers on discover of how the IRS will rule beneath related factual circumstances.

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