Nonprofits are required to file IRS Form 8282 for crypto donations of $500 or more if donated funds are exchanged for the U.S. dollar.
Engiven, an enterprise cryptocurrency donation platform, is working to simplify tax reporting for cryptocurrency donors and nonprofits by launching a tax form and appraisal service for crypto donations.
The Engiven platform now allows nonprofits and donors to automatically generate the Internal Revenue Service (IRS) tax form, the firm announced Tuesday.
According to Engiven, nonprofits have to file IRS Form 8282 for crypto donations of $500 or more if donated funds are exchanged for the U.S. dollar, while donors must file Form 8283 with their tax return for donations of $500 and more. The Engiven platform automatically enters the donation data into the IRS tax forms and sends the completed form to the nonprofit to sign and file.
Additionally, Engiven will provide a free appraisal to all cryptocurrency donors who give $5,000 or more worth of crypto using its platform.
In order to donate crypto worth $5,000 or more, donors are required to have the donated funds appraised by a qualified expert. According to Tony Oommen, vice president of the public charity Fidelity Charitable, the price of a qualified crypto appraisal may range anywhere from $100 to $600 for a $5,000 donation.
Engiven CEO James Lawrence noted that the new tax features and services on Engiven ultimately aim to help donors and charities focus on their mission by automating the tax form creation process.
“With tax season upon us, we want to ensure that donors and nonprofits on the Engiven platform have the required, pre-filled, tax forms needed to comply with IRS regulations for cryptocurrency donations,” Lawrence said.
Founded in 2018, Engiven is one of the largest crypto donation platforms in the United States, facilitating crypto donations for more than 400 religious groups and non-profit organizations, including the Salvation Army charity. In February, Engiven partnered with the U.S. Figure Skating, the national governing body for the sport of figure skating, to help it enable donations in cryptocurrencies like Bitcoin (BTC).
Related: Payment services provider Shift4 acquires The Giving Block for $54 million
The newly launched crypto tax-focused tools by Engiven come amid the looming tax deadline as U.S. residents are required to file taxes by April 18. According to major crypto tax compliance firm TaxBit, crypto users might be spending “thousands of dollars per year” to generate crypto tax forms without the help of specialized automated tax reporting services.
