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Donations of cryptocurrency

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Published by:
James Morris
Published on:
May 31, 2022
Modoras Accounting (QLD) Pty Ltd ABN 81 601 145 215
Donations on Cryptocurrency

The ATO has released some guidance on key issues to keep in mind when clients seek to claim deductions for donating cryptocurrency assets to charities. The starting point in these cases is to confirm that the entity receiving the assets is endorsed as a deductible gift recipient (DGR) and to establish whether the not-for-profit organisation is set up to accept cryptocurrency assets.

As cryptocurrency is treated as a type of property for the purpose of the deduction rules for gifts this makes the process more complicated compared with situations where clients are making cash donations.

In addition to considering whether clients can claim a deduction for a donation of cryptocurrency assets, it is important for clients to recognise that the donation might trigger CGT implications. If the client is transferring the assets to another party for no consideration then the market value substitution rules will need to be considered in calculating the capital gain or loss on disposal.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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