As increasing numbers of clients transact with cryptocurrency, it is important to realize that this class of asset has its own reporting requirements.
While one might think that crypto can be valued by reporting the value as listed on a crypto exchange, in CCA 202302012 the IRS clarified that a qualified appraisal is required when claiming a charitable deduction for contributions of crypto in excess of $5,000.
This also leads to the question of how to get a qualified appraisal for digital assets, which is not always an easy task. One can expect digital asset valuation to be a growth sector going forward as things continue to evolve.
A recent discussion of the recent Chief Counsel Memorandum can be found below: IRS Clarifies Qualified Appraisal Requirements for Cryptocurrency Donations
Thank you to Farrell Fritz Partner Azi Baer for this week’s Tax Tracker post!
