Crypto-assets (cryptocurrencies - 'Crypto') are considered property, not money (fiat currency) when considering the gifts and donations conditions, gift types, requirements and valuation rules.
The ATO has published its approach to deductibility and FBT treatment of gifts and donations of crypto.
Donating crypto with the intention of claiming a tax deduction? Here is what to consider.
Before making the transfer, here is what to consider:
find out if the not-for-profit (NFP) organisation is set up to accept crypto;
make sure you are able to transfer the crypto into the recipient's legal name;
find out if the NFP is a DGR (see how below).
find out if you are able to claim a tax deduction for a gift or donation of a crypto - it must meet:
the gifts and donations conditions; and
gift types, requirements and valuation rules (Note: when considering the gifts and donations conditions, gift types, requirements and valuation rules, crypto assets are property).
What is a DGR? How do I check DGR status?
A tax deduction can only be claimed for gifts or donations to organisations that have a status as a deductible gift recipient (DGR).
Before donating, check the DGR status of an organisation at ABN Look-up: Deductible gift recipients.
Can you claim a tax deduction for a gift or donation of crypto to crowdfunding platforms?
You 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.
Also, note the above considerations.
Are there CGT consequences when gifting or donating Crypto?
Crypto assets are property, therefore, a donation of crypto assets may mean 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, the ATO considers that CGT does not apply 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.
Depending on the circumstances, the crypto asset transaction will usually be reported by your accountant at both the CGT and the gifts and donations sections of an annual tax return.