’TIS THE SEASON OF GIVING! HUGE SILVER LINING TO THE FACT THAT DIGITAL CURRENCY IS ‘PROPERTY’
At the end of every year smart investors give their valuable stock away to friends and charity. Why? Are people just more generous during the holidays?
Vanguard and other big financial companies accept donations of publicly traded stock in their “donor-advised funds,” vehicles that let you contribute and book a tax deduction today but distribute the money over time to the charities of your choice. At Fidelity Charitable, long-term appreciated stock makes up for more than half of all contributions through the end of October.
Giving away appreciated stock is one of the best, if not the best, way to offset capital gains. You do not realize gains on gifted or donated property. So in light of the fact digital currency is officially considered property, the same applies (an upcoming white paper will address this in detail if you are interested in the accounting mechanics).
What’s so great about this is that it allows you to give money to charity or friends what would have otherwise been money owed to the IRS. Depending on an individuals transaction history, the tax obligation for capital gains can be drastically reduced or even eliminated. This is tremendously significant for both digital currency users and for the ecosystem in general. It also has the potential to make tipping with ChangeTip that much better!
Now for this to be possible, the accounting has to be done properly, and that’s where Libra comes in. Once you are connected to our service we will generate all the reporting information required for users to take advantage of this. Furthermore our system is smart enough to optimize your gifts and donations, meaning that, every time you donate or gift (or ‘tip’) your bitcoin, you are doing so with the coins that will realize the largest financial benefit.
And finally, we’ve chosen a partner to deliver this feature with, BitGive. BitGive is the first bitcoin charity to receive its official 501(c)(3) status, so when you donate bitcoin to them, you receive an official receipt that ensures your donation is tax deductible (which other charities accepting bitcoin, ahem, United Way, are not doing properly!). To celebrate, we are throwing a huge holiday party in San Francisco in collaboration with other great bitcoin companies: Chain.com, ChangeTip, BitGo, BitPay, and Follow the Coin.
Our donation tool is now live. We tell you exactly how many coins you can donate to offset up to all of your gains.