How Are Cryptocurrency Gifts Taxed in 2026?

Crypto gifts are usually not taxable when given or received. That changes if the transfer is really payment for work or services. It can also matter later when the recipient sells the gifted crypto.

Gifting crypto to friends, family, or recognized nonprofits can help avoid capital gains taxes. For US taxpayers, donations to tax-exempt organizations held for over a year can reduce income tax liability while supporting charitable causes.

Cryptocurrency gifts are digital assets (like Bitcoin, Ethereum, or altcoins) given to another individual or organization without expecting payment in return. You might gift crypto to relatives, friends, or nonprofits (such as a 501(c)(3)).

From a tax perspective, giving crypto gifts does not typically create an immediate tax burden for either party. However, tax obligations can arise later if the recipient sells or disposes of the crypto for a profit.

If you're researching how to gift crypto assets, you can use a crypto exchange or a peer-to-peer transfer to send them. For instance, some platforms let you send crypto easily. You can transfer to another person's digital wallet if you prefer a more direct approach. Just be sure you have the correct wallet address.

Regardless of the method, keep records of the transaction date, the crypto's value at the time, and (if you're the recipient) the donor's cost basis. Always consult a crypto tax professional about potential reporting requirements.

In the US, giving or receiving a modest crypto gift is generally not a taxable event. You do not pay capital gains taxes simply for transferring the crypto as a gift (if you are the giver). The recipient does not recognize income upon receiving it.

However, keep annual gift tax limits in mind. For 2026, the annual gift tax exclusion is $19,000 per recipient. If you’re married and gift-splitting, that’s $38,000 per recipient.

Gifts above the annual exclusion can require filing a gift tax return (Form 709), but you do not usually owe gift tax unless your taxable lifetime gifts exceed the lifetime estate and gift exemption, which is $15,000,000 for 2026.

Giving a crypto gift

• No immediate taxes: Transferring crypto to another individual or nonprofit is not a taxable event for you, the giver.

• Know your limits: If you exceed the annual exclusion amount, file Form 709.

• Share cost basis: The recipient needs your original cost basis (the price you paid) and acquisition date for the crypto to correctly report future gains or losses.

Receiving a crypto gift

• No initial tax: You do not owe taxes simply for receiving crypto as a gift.

• Future tax on sale: You’ll only face capital gains taxes (or potentially recognize losses) when you later sell or otherwise dispose of the gifted crypto.

• Recipient’s cost basis: Generally, the recipient’s cost basis is the donor’s cost basis.

• Capital gain or loss: If you sell the gifted crypto above its cost basis, you recognize a capital gain; if you sell below it, you have a capital loss.

• Unknown cost basis: If the donor’s cost basis is unavailable, you may need to use a $0 cost basis, potentially increasing your taxable gain.

• Gifts that had lost value: If the crypto was worth less than the donor paid on the day of the gift, a different rule applies. You use the donor's basis to figure a gain and the gift-date value to figure a loss. If the sale price lands between those two numbers, you report neither.

Some people gift crypto to manage capital gains. If you have held an appreciated cryptocurrency for a while, gifting it (rather than selling it) can help avoid realizing a taxable event.

For instance, you could gift crypto to a friend or family member and transfer your existing cost basis to them. This removes the appreciated asset from your portfolio without triggering tax on the gain today. The gain does not go away, though. It carries to the recipient with your basis, and they report it when they sell.

Here's an example of how cost basis and holding period work when the recipient sells. Dana bought 1 ETH on March 12, 2021, for $1,800, including fees. On June 3, 2025, she gifted that ETH to her brother Paul when the fair market value was $3,400. Paul sold it on February 10, 2026, for $4,100.

• Dana does not report a capital gain on the gift itself. Sending a true gift is not a sale.

• Paul's cost basis for a gain is Dana's $1,800, not the $3,400 value on the gift date. The IRS virtual currency FAQs use the donor's basis for that calculation.

• Paul's holding period includes the time Dana held the ETH, so the February 2026 sale is long-term. His capital gain is $4,100 minus $1,800, or $2,300.

If Dana had sold the ETH herself on June 3, 2025 for $3,400, that $1,600 long-term gain would have been on her return. The gift moved the later $2,300 onto Paul's 2026 return and kept the long-term clock running.

Here’s a quick breakdown of crypto gift taxes in countries outside the US.

United Kingdom

In the UK, gifting crypto can trigger capital gains tax for the giver unless the gift is made to a spouse or civil partner. Inheritance tax rules may also apply if the donor dies within 7 years of the gift.

Canada

Gifting crypto in Canada is often treated as a taxable disposition, meaning the giver must calculate and report capital gains or losses. Spousal transfers, however, are exempt under Canadian tax laws.

Australia

In Australia, gifting crypto is a Capital Gains Tax (CGT) event, and the donor must report any gains or losses based on the market value at the time of the gift. Gifts between spouses or within specific exemptions may not trigger CGT.

If your parents abroad send you crypto, or you transfer crypto across borders, additional tax obligations may arise. Some countries enforce strict reporting requirements for incoming or outgoing cryptocurrency gifts, especially when large amounts are involved.

For instance, Priya lives in Manchester and sends 0.8 BTC to her son, who files a US Form 1040. HMRC treats giving crypto away as a disposal unless the gift is to a spouse or civil partner, so Priya may owe UK Capital Gains Tax on the send. Her son generally does not include the coins in US income when he receives them. If gifts from Priya (and related foreign persons) exceed $100,000 in the year, he files Form 3520, Part IV. That form is a report. Missing it can still draw a penalty of 5% a month, capped at 25% of the unreported gift.

The other direction looks different. A US sister in Austin gifts 12 ETH to her brother in Toronto. She may need to file Form 709 if the fair market value exceeds the $19,000 annual exclusion amount. He generally does not have Canadian income just for receiving the coins. When he later sells, his Canadian cost is generally the fair market value on the day he received them, not her original purchase price.

An Australian uncle gifting to a US niece has an ATO CGT event on his side at market value. She generally has no US income on receipt, plus Form 3520 if the year's gifts from foreign individuals clear $100,000. Always check local regulations to ensure compliance.

• Treating a payment as a gift. If someone sent you crypto for work or services, that is income, not a birthday present.

• Skipping Form 709 because no gift tax is due. Gifts above the annual exclusion amount may still require a return, even if you do not owe tax.

• Not sharing your cost basis and purchase date with the recipient. Without that, their basis can be treated as zero when they sell.

• Using the gift-date value as basis when the coins had gone up. For a gain, you generally take the donor's basis, not the price on the day of the gift.

• Assuming a UK, Canadian, or Australian gift works the same as a US gift. Those tax offices can treat the send as a taxable disposal for the giver.

• Ignoring Form 3520 on a large gift from a parent who is not a US person.

• Claiming a charity deduction without a written acknowledgment once the contribution is $250 or more. Claims over $5,000 generally also need a qualified appraisal and Form 8283.