IRS CCMs On Crypto Donations And Crypto Losses

IRS Chief Counsel Memoranda: Cryptocurrency Donations Above $5,000 Need Qualified Appraisal and No Unrealized Cryptocurrency Loss Without Disposition

Introduction

The IRS recently released two chief counsel memoranda addressing cryptocurrency donations and cryptocurrency tax losses. In CCM 202302012¹, the IRS stated that a taxpayer that donates cryptocurrency and seeks a charitable contribution deduction of more than $5,000, must obtain a qualified appraisal under section 170(f)(11)(C) to qualify for the deduction under section 170(a). In the second, CCM 202302011², the IRS stated that a taxpayer that owns cryptocurrency that has substantially declined in value has not sustained a cryptocurrency loss under section 165 due to worthlessness or abandonment of the cryptocurrency. While these conclusions may not be surprising, these written determinations provide a glimpse into the IRS's thinking on the issues. The IRS likely issued these written determinations in