Gifting Bitcoin in 2025: What the IRS says and how to avoid tax trouble

💡 DMK Insight

So, gifting Bitcoin might sound like a loophole, but here’s the catch: the IRS has specific rules that could bite you later. While you won’t face immediate taxes when you gift Bitcoin, the recipient’s future capital gains will be based on your original purchase price. This means if Bitcoin appreciates significantly after the gift, they could owe substantial taxes when they sell. For traders, this is a crucial reminder to consider the long-term implications of any gifting strategy, especially in a volatile market. If you’re planning to gift, keep an eye on Bitcoin’s price movements and the IRS guidelines to avoid unexpected tax liabilities. Also, remember that the annual gift tax exclusion limit is $17,000 for 2023, so gifts above this amount could trigger additional reporting requirements. Watch for any changes in tax regulations that could impact your strategy. Staying compliant now can save you headaches down the line.