Fidelity Charitable has added XRP to its list of assets, allowing donors to make contributions using the world’s third-largest cryptocurrency.
According to the announcement,
“The addition of Ripple expands the existing array of assets, including bitcoin, that donors can contribute into their donor-advised funds to fuel their philanthropy.”
Cryptocurrency donations give people a way to increase their charitable giving since gifts are exempt from paying capital gains taxes. Instead, the 501(c)(3) charity receives the full value of a donor’s contribution.
Crypto Donations to Fidelity Charitable
Source: Fidelity Charitable
In the example above there are three key assumptions.
- Assumes all realized gains are subject to the maximum federal long-term capital gains tax rate of 20% and the Medicare surtax of 3.8%. This does not take into account state or local taxes, if any.
- Amount of the proposed donation is the fair market value of the appreciated property held more than one year that donor considers, as determined by a qualified appraisal.
- Assumes a contribution of 100 bitcoin. Alex’s tax basis is assumed to be $100/bitcoin. If Alex sold 100 bitcoin for $250,000, he would have $240,000 in capital gains and would pay $57,120 in tax.
The organization says there’s also another upside to making donations using cryptocurrencies such as Bitcoin and XRP to Fidelity Charitable, which has a donor-advised fund program: participants can recommend how the contribution is invested and potentially grow it tax-free.
The organization has helped donors support more than 278,000 nonprofit organizations with more than $35 billion in grants. It hit a milestone last year with $1 billion in contributions from complex assets such as private stock,