This is post is taken from the Frequently Asked Questions.

Now that you’ve decided to donate bitcoin, what are the tax responsibilities?

If you use the standard deduction when you file your taxes, then the below information does not apply to you. You cannot claim charitable donations unless you itemize. A tax strategy that you could use is to group multiple years worth of itemized deductions into a single year in order to get the tax benefit of the donations for that year.

If you itemize and you have donated more than $500 and wish to claim a federal tax deduction then you have to submit IRS Form 8283. This is where noncash contributions are tracked. If the total aggregate amount is less than $5000, then the donor can report the fair market value on Form 8283 himself.

If the total amount exceeds $5,000, then the IRS currently requires an independent qualified appraiser decide on the Fair Market Value of the gifts. The donor or donee is not allowed to declare this himself.

After a qualified appraiser fills out Form 8283, both the donor and donee sign it and then the donor is able to count the qualified amounts as a tax deduction.

I would recommend using the appraisal services from https://cryptoappraisers.com. Randy charges a flat $120 for a single appraisal and an additional $180 for up to 20 appraisals.

The IRS currently requires a qualified appraisal for the bitcoin donation. This generally costs $120-300. If you do 1 bitcoin donation a month, the cost for the appraisal would be at the $300 level in order to get all the donations from the entire year appraised. You’ll have to look at the amount of bitcoin donations you did and decide if it is worth paying the appraisal fee to otherwise get the full tax deduction.

If you donate more than $1,500 of bitcoin a year, then paying for the appraisal is worth it. 20% of $1,500 is $300. You’ll have to do the math, but depending on your cost basis for the donated bitcoin. It may either be cheaper to sell the bitcoin, pay the 20% capital gains, and donate what’s left.