Digital Asset Donations Act (H.R. 9173)

Summary

Changes tax rules to let people who donate widely traded digital assets to charity claim a deduction without getting a formal appraisal.

What problem does this solve?

Donating digital assets like cryptocurrency to charity can be hard because tax rules require a formal, expensive appraisal for large non-cash gifts. This bill removes the appraisal rule for widely traded digital assets, treating them like stocks and making it easier to donate them and get a tax deduction.

What does this bill do?

Exempts digital assets from appraisal requirement

Removes the need for a formal appraisal for charitable donations of 'widely traded digital assets', similar to the rule for publicly traded stocks.

Defines 'widely traded digital asset'

Establishes specific criteria for a digital asset to qualify, including having a market capitalization over $500 million and being widely available on an exchange for a full year.

Grants authority to prevent abuse

Allows the Secretary of the Treasury to exclude digital assets that lack reliable price discovery or are at risk of price manipulation from the appraisal exemption.

Adjusts market cap requirement for inflation

The $500 million market capitalization requirement for a 'widely traded digital asset' will be adjusted for inflation in calendar years after 2027.

Defines key digital asset terms

Adds new definitions to the tax code for terms like 'digital asset', 'wrapped digital asset', and 'stablecoin' to clarify how they are treated for tax purposes.

Who does this affect?

Cryptocurrency investors and donors
Charitable organizations and non-profits

What is the real world impact?

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Encourages charitable giving

Simplifies the process for donating digital assets to charities, potentially increasing the amount of support non-profits receive. It treats these donations similarly to publicly traded stocks.

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Favors large cryptocurrencies

The specific requirements, like a $500 million market capitalization, mean only large, established digital assets qualify. This could exclude donations of smaller, emerging assets from this simplified process.

When does this start?

The new rules for donating digital assets would apply to tax years starting after December 31, 2026.

Inflation adjustment for market cap

Starting after calendar year 2027, the $500 million market capitalization requirement will be adjusted for inflation.