2017 may have been the year of the crypto investor, and returns were beyond heady. But it’s 2018 now, and interest in crypto remains high. It may even be more mainstream now than it was last year. Taxes are a worry of course, and they are arguably more difficult than last year. For one, it is clear that so-called 1031 tax-free exchanges can no longer be used for crypto. There any other ways to transfer crypto without triggering taxes, but there is no silver bullet. Still, there are some worth considering the right facts. For example, how about gifts?
You can give crypto as a gift, and it doesn’t trigger income taxes. That’s right, no income tax to you as the donor, and no income tax to the recipient. Of course, when the recipient transfers or sells it, there would be income taxes then. And at that point, the donee would need to calculate gain or loss. What is his or her tax basis, since it was a gift? The tax basis is the same as it was in your hands when you made the gift.
Aryan Nava 