To provide an example, if you gift $66,000 of cryptocurrency to a single recipient during 2022, you can claim the annual gift tax exemption to exclude $16,000 of the gift. This means that you can gift up to $12.06 million before you would need to pay gift taxes. For 2022, each taxpayer can use a $12.06 million gift exemption during their lifetime. However, you can use your lifetime gift and estate tax exemption to avoid gift tax on most gifts. If you give more than $16,000 of cryptocurrency to a single recipient during a tax year, then you may be required to pay tax on that gift. This means that you can gift up to $16,000 of cryptocurrency per recipient to as many recipients as you desire without having to pay any taxes on the gifts. For 2022, the annual gift tax exemption is $16,000. Whether or not you are required to pay taxes on gifted cryptocurrency will depend on how much cryptocurrency you gift.
Do I have to pay taxes on gifted cryptocurrency? The recipient should also know that it can be difficult or impossible to recover cryptocurrency if the passcode is forgotten. You may want to make the recipient aware of the risk of any transfers that they make of the gifted cryptocurrency.
Before you send a gift, make sure it is going to the right wallet. Gifting cryptocurrency is easy, but you should remember that transactions cannot be reversed or changed. These platforms are easy to navigate and operate much like a stock trading platform.Ĭryptocurrency can make an excellent gift because it can be sent to anyone in the world. If you are gifting cryptocurrency to someone who has never had or used it before, you may want to encourage them to open an account with one of the large digital asset platforms located in the United States, such as Coinbase, Robinhood Crypto, or Gemini. How do I give cryptocurrency to someone who is new to it? You can then gift the cryptocurrency to the recipient’s newly created wallet. If the recipient does not already have a compatible cryptocurrency wallet, it may be helpful if you assist the recipient with opening a wallet. If the recipient already has a compatible cryptocurrency wallet, then you can simply gift the cryptocurrency to the recipient’s existing wallet. Yes, cryptocurrency can generally be easily gifted to another person.
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