Cryptocurrency Gift Tax: What You Need to Know

When dealing with cryptocurrency gift tax, the tax on transferring crypto assets without receiving full payment in return. Also known as gift tax, the federal levy on the donor for gifts exceeding the annual exclusion, it falls under the jurisdiction of the IRS, the Internal Revenue Service that enforces U.S. tax law. The core idea is simple: the donor must determine the fair market value of the crypto at the moment of transfer, report that value if it pushes total gifts over the exemption threshold, and potentially file Form 709. This creates a chain of obligations—valuation, reporting, and record‑keeping—that ties the three entities together.

Valuing a crypto gift isn’t like appraising a house; the market can swing 10 % in minutes. The tax basis, the donor’s original cost plus any adjustments becomes the recipient’s starting point for future capital‑gain calculations. If the recipient later sells the token, the capital‑gain tax hinges on the difference between that basis and the sale price, so an accurate basis protects both parties from unexpected tax bills. Because crypto trades on multiple exchanges, the fair market value is usually the average price across reputable platforms at the exact transfer timestamp. This valuation method influences the calculation of the gift’s total value, which in turn determines whether the donor exceeds the annual exclusion and must file a gift‑tax return. In short, gift tax rules shape crypto asset valuation, and accurate valuation safeguards future capital gains, taxes owed when the asset is later sold.

Planning ahead can keep the process painless. Most donors stay under the $17,000 (2023) annual exclusion per recipient, avoiding any filing. For larger gifts, using a qualified appraisal service that tracks blockchain timestamps can solidify the reported value. Remember that the total amount of gifts to a single person over a lifetime is limited by the lifetime exemption (currently $12.92 million), after which the donor pays a 40 % tax on the excess. The IRS also requires a Form 709 filing by April 15 of the year following the gift, even if the donor owes no tax because the exemption covers the amount. Keeping detailed transaction logs, wallet addresses, and price snapshots helps satisfy audit requests. By understanding how the IRS treats crypto gifts, applying consistent valuation methods, and tracking tax basis, you can gift digital assets confidently without surprise bills.

Below you’ll find a collection of articles that break down each step—valuation techniques, Form 709 filing tips, exemption strategies, and real‑world examples—so you can apply the rules to your own crypto gifting plans.