To gift cryptocurrency, send it from your wallet or exchange account to the recipient’s verified public wallet address, record its U.S. dollar value at the moment of transfer, and pass along your original purchase records so the recipient can calculate tax when they eventually sell. For 2026, you can give up to $19,000 in crypto to any single person without filing anything with the IRS.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 20262Internal Revenue Service. Digital Assets3Internal Revenue Service. Digital Assets – Taxpayer Advocate Service
Sending the Crypto
You need the recipient’s public wallet address, the alphanumeric string that functions like an account number on the blockchain. Never ask for or share a private key, which controls ownership of the wallet itself. Double-check every character before sending. Blockchain transactions are irreversible, and sending to the wrong address typically means a permanent loss of funds.
Confirm the recipient’s wallet supports the same blockchain network as the asset you are sending. Sending an Ethereum-based token to a Bitcoin-only address, for example, will result in the permanent loss of those tokens. Many centralized exchanges offer internal transfer tools that let you send crypto using an email address or platform username, which eliminates network-compatibility errors and often includes built-in address validation.
Open your wallet or exchange account and go to the “Send” or “Withdraw” function. Paste the verified address, enter the amount, and review the details before confirming. Most platforms require a security step, usually two-factor authentication or an email confirmation, before broadcasting the transaction.
Once submitted, the transaction enters the network’s queue for validation. Track its status by entering the transaction hash from your wallet or exchange into a blockchain explorer. Confirmation times range from under a minute on some networks to an hour or more on congested ones. When the transaction shows “Confirmed” or “Success,” the crypto belongs to the recipient. Save the transaction hash with your other gift records.
What to Record and Give the Recipient
Record the fair market value of the crypto in U.S. dollars at the exact time of the transfer. Use the price shown on a major exchange or a market data aggregator, and save a screenshot or exported receipt. That valuation determines whether your gift exceeds the annual exclusion, and it becomes part of the recipient’s basis documentation.
Along with the transfer-date value, give the recipient three things: your original purchase date, your original purchase price, and the date of the gift. These are what they will need to calculate their tax when they eventually sell. If the recipient cannot document your original basis, the IRS treats the basis as zero, which means the entire sale price could be treated as taxable gain.4Internal Revenue Service. Frequently Asked Questions on Virtual Currency Transactions Passing your purchase records to the recipient is one of the most valuable things you can do.
The $19,000 Annual Exclusion and Form 709
For 2026, you can give up to $19,000 worth of cryptocurrency to any single recipient without any gift tax reporting requirement.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 The exclusion applies per recipient, so $19,000 to your sister, $19,000 to a friend, and $19,000 to a niece in the same year all fall inside it, with no filing obligation.5Office of the Law Revision Counsel. 26 U.S.C. 2503 – Taxable Gifts
If a gift to any one person exceeds $19,000 in a calendar year, you must file IRS Form 709, the United States Gift and Generation-Skipping Transfer Tax Return.6Internal Revenue Service. 2025 Instructions for Form 709 Filing does not necessarily mean you owe tax. The amount above $19,000 is applied against your lifetime exemption. Form 709 is due by April 15 of the year following the gift, on the same timeline as your income tax return.
The Lifetime Exemption
When a crypto gift exceeds the annual exclusion, the excess reduces your lifetime gift and estate tax exemption rather than creating an immediate tax bill. For 2026, that exemption is $15,000,000 per individual.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Unless your total lifetime gifts above the annual exclusion, combined with the value of your estate at death, exceed $15 million, you will not owe any federal gift tax.
Even though most people never owe gift tax, skipping Form 709 when it is required can still create problems, including IRS correspondence and no record that you properly used part of your exemption. Failure-to-file penalties also apply to any unpaid tax.7Internal Revenue Service. Failure to File Penalty
What the Recipient Inherits
When you give someone crypto, they inherit your original cost basis, called carryover basis.8Office of the Law Revision Counsel. 26 U.S.C. 1015 – Basis of Property Acquired by Gifts and Transfers in Trust If you bought one Bitcoin for $5,000 and gift it when it is worth $60,000, the recipient’s basis remains $5,000. If they later sell for $70,000, they owe capital gains tax on the $65,000 difference, not just the $10,000 of appreciation after the gift.
The recipient also inherits your holding period. If you held the crypto for more than one year before gifting it, their eventual sale qualifies for long-term capital gains rates regardless of how briefly they held it.9Office of the Law Revision Counsel. 26 U.S.C. 1223 – Holding Period of Property Long-term rates are significantly lower than short-term rates for most taxpayers. This differs from inherited assets, which receive a stepped-up basis equal to fair market value at the date of death.
Gifting Crypto That Has Lost Value
A special rule applies when the crypto’s fair market value at the time of the gift is lower than your original cost basis. For calculating a future loss, the recipient’s basis is the lesser of your original basis or the fair market value on the date of the gift.4Internal Revenue Service. Frequently Asked Questions on Virtual Currency Transactions For calculating a future gain, the basis reverts to your original cost. If the eventual sale price falls between those two figures, there is no recognized gain or loss.8Office of the Law Revision Counsel. 26 U.S.C. 1015 – Basis of Property Acquired by Gifts and Transfers in Trust Because this dual-basis rule is easy to get wrong, make sure the recipient knows both your original purchase price and the market value on the day they received the gift.
Gifts Between Spouses and Gift Splitting
Crypto transfers between spouses who are both U.S. citizens are covered by the unlimited marital deduction, so there is no cap on how much you can give your spouse tax-free, and Form 709 is generally not required.10Office of the Law Revision Counsel. 26 U.S.C. 2523 – Gift to Spouse6Internal Revenue Service. 2025 Instructions for Form 709 If your spouse is not a U.S. citizen, a separate annual exclusion of $194,000 applies for 2026 instead of the unlimited deduction.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Married couples can double the annual exclusion for gifts to third parties by electing to split gifts. A gift made by one spouse is then treated as if each spouse made half.11Internal Revenue Service. Instructions for Form 709 (2025) If you give $38,000 in crypto to an adult child and elect gift splitting, each spouse is treated as giving $19,000, keeping both halves inside the annual exclusion. Both spouses must consent, and each must file their own Form 709 for the year, even if only one actually made the gift.
Donating Crypto to Charity
Donating crypto directly to a qualified charity can provide two benefits: you avoid capital gains tax on any appreciation, and you may claim a deduction for the full fair market value. Selling first and donating the cash is less efficient because the sale itself triggers a capital gains event.
If the total deduction for your noncash charitable contributions exceeds $500, you must file Form 8283 with your tax return.12Internal Revenue Service. Instructions for Form 8283 For crypto donations valued at more than $5,000, a qualified independent appraisal is also required.13Internal Revenue Service. About Form 8283, Noncash Charitable Contributions Your deduction for donated crypto held more than one year is generally capped at 30% of your adjusted gross income, with any unused portion carried forward for up to five additional tax years.14Office of the Law Revision Counsel. 26 U.S.C. 170 – Charitable Contributions and Gifts
A Note on Broker Reporting
Starting with transactions in 2026, cryptocurrency exchanges and other brokers must report sales and exchanges of digital assets to the IRS on Form 1099-DA, including cost basis information.15Internal Revenue Service. Final Regulations and Related IRS Guidance for Reporting by Brokers on Sales and Exchanges of Digital Assets That form applies to dispositions where the seller receives something of value: a sale for cash, a swap for another token, or payment for goods and services. A gift transfer itself, where no proceeds change hands, does not appear to trigger 1099-DA reporting. When the recipient eventually sells the gifted crypto through a broker, that sale will be reported, and the broker may not have your original purchase records. That is another reason to give the recipient your basis documentation at the time of the gift.