Gifts and Donations of Crypto: Records to Hold

Giving crypto to someone feels different from selling it, because no money comes back to the giver. Tax rules do not always see it that way. According to the Canada Revenue Agency (CRA), transferring crypto as a gift or donation is a disposition. A disposition is any event in which a person stops owning a unit and passes it on, and it is the event that tax rules look at. A sale, a trade for another coin and a payment for goods all fall in the same family. For an ordinary reader, the point is simple. A gift to a friend, a relative or a charity is still a moment to note down, even when nothing was received in return.

The CRA repeats the idea in a 2023 tax tip. According to that tip, giving crypto away is among the disposals that may have tax consequences. The word may matters. The tip does not say that every gift leads to tax, and it does not describe the result for each case. It places the gift on the list of events worth taking seriously. In practice, this means the giver should treat the transfer like any other disposition when keeping books. The wallet history shows that a transfer went out, but it does not show why, to whom or on what date the value was set. Those details come only from the person who made the gift, so they need to be written down at the time.

Consider a made-up case. Priya decides to give some of her crypto to a cousin who is starting a small business. She also sets aside a separate portion for a registered charity she supports. On the day of each transfer she opens a spreadsheet and writes the date, the number of units, the Canadian-dollar value on that date and the name and address of the recipient. She saves the wallet transaction record next to those notes. Months later, when she prepares her tax return, she does not need to reconstruct anything from memory. Her notes answer the questions a preparer would ask, and she can show where each figure came from. A spreadsheet is enough; the habit matters more than the tool.

The CRA's capital gains page adds some detail but leaves gaps. According to that page, the amount included can be reduced to nothing for certain gifts to qualified donees, and a gift that comes with an advantage may be treated differently. A qualified donee is an organization that the tax rules recognize for such gifts. The difficulty is that the pages reviewed here do not confirm how that rule applies to a crypto donation specifically. A reader who assumes it applies in the same way may be wrong. A reader who assumes it never applies may be wrong as well. The honest position is that the answer is not settled on these pages.

That is why the checks matter more than a guess. Does the CRA publish separate gifts guidance that covers the situation? Was the recipient an individual, or an organization that might qualify as a donee? Did the giver receive anything in return, such as a ticket, a service or a thank-you item? Is the date of the transfer written down, along with the number of units and the Canadian-dollar value on that date? Is the identity or address of the recipient on file? The CRA's page on books and records for crypto lists the kinds of details to keep, and a short note for each question can be kept with the wallet history in one folder.

To read more, start with the CRA pages on income from crypto-asset transactions, on calculating and reporting capital gains and losses, and the 2023 tax tip on cryptocurrency. Each page carries its own date, and the rules can change, so check the date before relying on any detail. This page is general education about record keeping. It does not decide whether a particular gift is taxable, whether a recipient is a qualified donee or how much should appear on a return. Those questions belong to the CRA's own guidance and to a qualified tax professional who can review the actual facts and documents of the case.

• According to the CRA, giving crypto as a gift or donation is a disposition
• Write down the date, the units, the Canadian-dollar value on that date and who received the gift
• The pages reviewed do not confirm how the donee rule applies to crypto, so check the CRA gifts guidance