Boost Your Charitable Contributions with Cryptocurrency This Year! 🎉
As cryptocurrency continues to gain popularity, there is growing enthusiasm for using these digital assets to support charitable causes. Investors are beginning to understand the potential benefits of donating cryptocurrencies, which can enhance both their charitable impact and tax advantages. The increasing acceptance of crypto by various charities has opened new avenues for altruism, encouraging more individuals to contribute to causes they care about through their cryptocurrency holdings.
Increasing Trend in Crypto Donations 🚀
Interest in donating cryptocurrency is climbing as users recognize the dual advantages of benefiting charitable organizations and maximizing their tax benefits. Kyle Casserino, a vice president and charitable planning consultant at Fidelity Charitable, noted the shifting mindset among investors. He stated, “A lot of folks have begun to realize that crypto giving is hugely beneficial,” highlighting the notable rise in donations of popular cryptocurrencies like Bitcoin, Ethereum, and Litecoin.
Crypto Contributions to Charitable Organizations 📈
In 2024, Fidelity Charitable has reported receiving an impressive $688 million in cryptocurrency donations through November 19. This figure shows a remarkable increase from just $49 million in all of 2023 and $38 million in 2022. To provide further insight, since it began accepting cryptocurrencies in 2015, Fidelity Charitable has accumulated over $565 million in gifts in total.
Casserino emphasized that Bitcoin remains the most popular choice among donors, as it constitutes a significant portion of the volume received. Meanwhile, DAFgiving360, an organization previously known as Schwab Charitable, indicated that it received 63% of its donations in the form of non-cash assets, which include cryptocurrencies and stocks, for the fiscal year 2024. As of January 2024, 56% of the leading 100 charitable organizations in the United States acknowledged the acceptance of crypto donations, according to The Giving Block.
Benefits of Donating Appreciated Crypto 💡
When it comes to optimizing tax breaks, donating appreciated crypto or stocks instead of cash is a strategy worth considering. Most taxpayers utilize the standard deduction on their tax returns, which limits the ability to itemize deductions for charitable contributions. However, if you can itemize your deductions, gifting appreciated assets can be financially advantageous.
By donating investments that have increased in value, you can sidestep the capital gains taxes often triggered when selling those assets. This approach not only benefits you as the donor but also provides more support to charitable organizations. Generally, if you have held the asset for more than a year, you can claim a deduction based on its fair market value. Limitations apply, including a cap of 30% of your adjusted gross income for contributions made to public charities.
Crypto Strategies for Charitable Giving 🤔
Andrew Gordon, a tax attorney and president of Gordon Law Group, recommended this approach, stating, “It’s a good strategy, especially with crypto and bitcoin at all-time highs. It’s something that we’re going to be suggesting more to people.” With Bitcoin’s value hovering around $95,000 on December 4, reflecting a nearly 120% increase since the start of the year, this is a significant consideration for investors looking to maximize their donations.
The evolving landscape of cryptocurrency donations provides individuals with exciting new methods of philanthropy. “This year” has already shown an increase in the awareness and acceptance of these innovative ways to give back. As more charities embrace cryptocurrency, those with digital assets have the opportunity to make impactful contributions while optimizing their financial strategies.
Final Thoughts on Crypto Charitable Contributions 🌟
As digital currencies continue to gain traction, they are transforming the way individuals approach philanthropy. The tax advantages associated with contributing appreciated assets like cryptocurrency make this a particularly attractive option for many investors. Exploring the avenues available for crypto donations can lead to both tax savings and the fulfillment that comes from supporting charitable causes.
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