Nonprofits receiving donations of virtual currency (such as bitcoin) now have additional guidance from the IRS on donor acknowledgment and IRS reporting responsibilities.

Because virtual currency is considered property for tax purposes, this guidance on virtual currency donations follows similar principles regarding other non-cash gifts. These include issuing appropriate gift acknowledgments; filing the Form 8282 when virtual currency is sold, exchanged, or otherwise disposed within three years of the donation; and the general non-cash gift reporting requirements applicable to Form 990 filers.

View the IRS Frequently Asked Questions on Virtual Currency Transactions (see Q35 and Q36).

For more tools and tips on gift acknowledgments and reporting, watch ECFA’s latest free webinar-on-demand 10 Essentials of Gift Acknowledgement & Reporting.