How can I minimize the capital gains tax on gifted cryptocurrency?

3 answers

• May 06, 2022 · 3 years ago
  One strategy to minimize the capital gains tax on gifted cryptocurrency is to hold onto the cryptocurrency for at least one year. By holding it for more than a year, you may qualify for long-term capital gains tax rates, which are typically lower than short-term rates. This can help reduce the amount of tax you owe when you eventually sell or exchange the gifted cryptocurrency.
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• May 06, 2022 · 3 years ago
  Another strategy is to consider gifting the cryptocurrency to a charitable organization. By donating the cryptocurrency directly to a qualified charity, you may be eligible for a tax deduction based on the fair market value of the cryptocurrency at the time of the donation. This can help offset any capital gains tax liability you may have.
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• May 06, 2022 · 3 years ago
  According to BYDFi, another option to minimize the capital gains tax on gifted cryptocurrency is to utilize tax-loss harvesting. This involves strategically selling other investments that have experienced losses to offset the capital gains from the gifted cryptocurrency. However, it's important to consult with a tax professional or financial advisor to ensure you understand the tax implications and requirements of tax-loss harvesting.
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