Fri Apr 13, 2018 5:00am EST
Michael Powell and Christian von Donat launch cryptogiving.ca on Parliament Hill. The website connects donors interested in giving cryptocurrency with charities that accept it. (CNW Group/Cryptogiving.ca)
Michael Powell and Christian von Donat launch cryptogiving.ca on Parliament Hill. The website connects donors interested in giving cryptocurrency with charities that accept it. (CNW Group/Cryptogiving.ca)

Cryptocurrency donations face different tax treatment than other asset donations

OTTAWA, April 13, 2018 /CNW/ - Today, a new website connecting donors interested to give to charitable organizations that accept cryptocurrencies was launched. Cryptogiving.ca will serve as the single point of reference to connect individuals looking to contribute with charities across Canada that are willing to accept digital currencies like Bitcoin and Ethereum.

Michael Powell and Christian von Donat launch cryptogiving.ca on Parliament Hill. The website connects donors interested in giving cryptocurrency with charities that accept it. (CNW Group/Cryptogiving.ca)

"This rise in interest and value of digital currencies over the last year has led to a substantial increase in interest in their donations for charitable purposes, both by those giving and the organizations receiving," said Michael Powell, spokesperson for cryptogiving.ca. "Dozens of Canadian charities are currently accepting or moving to accept cryptocurrency donations. As one example, Covenant House in Toronto launched a successful campaign to raise $250,000 via donations of Ethereum during the December holiday season. Similarly, Pathways to Education has been accepting donations via Bitcoin since 2013, and has recently seen increased volume in donations, including a large donation in December."

Many charities in Canada that accept donations of cryptocurrencies also provide tax receipts for charitable donations, meaning that you can claim the deduction on your income taxes. However, cryptocurrencies are still a relatively young technology, and investment vehicle and regulations surrounding their use and donation have not kept pace with changes in technology. This is particularly true with how CRA treats capital gains on charitable donations of crypto currency.

"Presently, charitable cryptocurrency donations receive none of the favourable capital gains treatment that other donations of assets receive, such as traditional securities, like stocks," continued Powell. "These securities are exempted from capital gains when given to charities. This incentivizes the direct donation of securities, which ultimately means larger donations."

Because cryptocurrency donations are not exempted, donors are responsible for paying any capital gains taxes associated with the donation. This can represent a significant amount, funds that could otherwise be going to the charity. This also discourages a younger demographic of technology-oriented individuals from being incentivized to donate to charities.

"Given the interest in charitable giving of cryptocurrency, it is important that Canada update charitable giving rules to treat cryptocurrency donations equivalently to charitable gifts of other investments," concluded Powell. "The public policy aim – to encourage giving – is the same for both."

 

SOURCE Cryptogiving.ca



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