Does a cryptocurrency donation require a qualified appraisal?

When a cryptocurrency appraisal is required

A claimed deduction for a cryptocurrency donation over $5,000 requires a qualified appraisal under section 170(f)(11)(C). An exchange-reported cryptocurrency value does not satisfy the appraisal requirement or qualify for the deduction under section 170(a).

Appraisal timing and preparation

A qualified appraisal must relate to an appraisal made no earlier than 60 days before the contribution. A qualified appraiser must prepare, sign, and date the appraisal.

An appraiser is excluded from qualified-appraiser status for a donation if the donor knows facts that would lead a reasonable person to expect the appraiser to overstate the donated property's value. That exclusion concerns the appraiser's status for that donation.

What the appraisal describes

A qualified appraisal must describe the contributed property in enough detail for an unfamiliar person to identify it. For real or tangible personal property, the appraisal must also state the property's condition.

The IRS says taxpayers must retain records supporting charitable contributions. Required records depend on the contribution amount and whether the contribution is cash, noncash, or service expenses.

The higher-value noncash rule

A noncash charitable contribution over $500,000 has an additional substantiation condition. No deduction is allowed unless the donor obtains a qualified appraisal prepared by a qualified appraiser and substantiates the contribution with a contemporaneous written acknowledgment.

The cryptocurrency conclusion addresses a claimed deduction over $5,000. The separate noncash rule states a threshold over $500,000 and requires both the appraisal and a contemporaneous written acknowledgment for a deduction.