The IRS has continued its mission to deploy more clarity for tax scenarios for investors and cryptocurrency businesses. Recently, the IRS issued another round of further guidance, but for tax-exempt charitable organizations.
The new addition to the IRS FAQ section was introduced under the radar on their official website.
The new rules are as follows:
- Charity organizations that are generally exempted from tax collections have to report virtual currency based donations on Form 990
- If tax-exempt organization receive virtual-currency-based donations exceeding $5,000 in value, they should generally expect to sign Form 8283, which acknowledged receipt of the contributions
- Donations equal to or exceeding $250 in value should also have written acknowledgement of the donation.
While the IRS has helped to provide more clarity in the recent months, there are still some confusing questions that arrive with each round of guidance on cryptocurrencies. No one is certain as to the future of cryptocurrencies in the eyes of the IRS and how the hammer will fall.
But with more charitable organizations opening their wallets to accept cryptocurrency donations, it was a crucial decision to begin rolling out and explaining new taxation ground rules.