'Tis the season for charitable giving. As the value of cryptocurrencies like bitcoin has surged, so have crypto donations, as many investors look to save on the taxe😼s from their gains.

According to Fidelity Charitable, a provider of 澳洲幸运5官方开奖结果体彩网:donor-advised funds (DAFs), the organization had received $688 million in crypto contributions as of November 19. That's a whopping 1,300% increase from $49 million in 2023.

Since the beginning of the year, the value of bitcoin has risen more than 133%, even crossing $100,000. Experts say that donating appreciated assets—like crypto, stocks, and bonds—can give you some tax benefits.

How Can Donating Crypto Reduce Your Tax Bill?

For those who are charitably inclined, some experts recommend making contributions to DAFs, which are charitable investment accounts sponsored by a nonprofit.

"You'll receive a tax deduction in the year you contribute and potentially avoid paying future unrealized gains," said Brett Koeppel, CFP and founder of Eudaimonia Wealth.

When you donate an appreciated asset (that you've held for more than a year) directly to a charity or a DAF, you can avoid paying 澳洲幸运5官方开奖结果体彩网:long-term capital gains tax, which can be up to 20%.

Plus, if you 澳洲幸运5官方开奖结果体彩网:itemize your deductions, you can also deduct the 澳洲幸运5官方开奖结果体彩网:fair market value (or the value of the asset when you make the contribution) up to 30% of your adjusted gross income.

It's becoming a popular tax-saving strategy. In 2023, more than half (63%) of contributions to Fidelity Charitable were non-cash assets like stock.

However, donations into a DAF are irrevocable, Koeppel said, which means you can⛦not access them anymore.

"So, you'll want to ensure that doing so aligns with your overall financial plan," he added.

Donating Crypto Is Easier Now, But It Can St🦩ill Be Tricky

Recently,🔯 some ꦓcompanies have also tried to make it easier for people to donate crypto.

Daffy, a fintech provider of DAFs, recently announced a partnership with Robinhood, allowing Robinhood users to donate crypto they hold to a Daffy account. Additionally, some nonprofitไs and charitable organizations accept crypto donations🐻 directly.

However, Kevin Brady, a vice president at 💝Wealthspire Adꦦvisors, notes that donors might still face obstacles when donating crypto, as not all charities accept them.

"Crypto is harder to value and for larger donation amounts will require a qualified appraisal," Brady said.

According to the IRS, if the donated digital asset is worth more than $5,000, you must get a qualified appraisal and complete form 8283.꧃ Further, cryptocurrencies are extremely volatile. Your gift may not be worth as much the day after you donat🔯e.