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

💡 DMK Insight

So, gifting Bitcoin could save you on taxes, but it comes with strings attached. The IRS has specific guidelines on how to handle cryptocurrency gifts, and while you won’t face immediate tax implications, the recipient might. This means if you’re planning to gift Bitcoin, you should be aware of the fair market value at the time of the transfer. If the recipient sells it later at a profit, they’ll be responsible for capital gains tax based on that initial value. This could affect your strategy if you’re considering gifting as a way to manage your crypto holdings or pass on assets. Look out for the annual exclusion limit for gifts, which can help you avoid reporting requirements. If you’re gifting above that limit, you’ll need to file a gift tax return. The real story is that while gifting can be a smart move, it requires careful planning to avoid future tax headaches. Keep an eye on Bitcoin’s price movements, as fluctuations could impact the value of your gift significantly. Monitoring these changes can help you decide the best time to make your move.