Crypto Tax Guide: Crypto Gifting Tax Rules In The US (2025 Update)

The Internal Revenue Service (IRS), the governing authority for determining, assessing, and collecting internal revenue taxes in the United States, defines the gift tax as “a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return.” According to the IRS, the gift tax applies whether or not the donor intends the transfer to be a gift. Cryptocurrency and its role in society have changed; people are using cryptocurrencies in their daily lives. In 2025, cryptocurrencies like BTC, ETH, and XRP are used for shopping, dining, and various other point-of-sale transactions. In a society where cryptocurrencies are a financial tool, gifting cryptocurrencies to friends and family is not an unimaginable idea. Gifting is taxable, but the question is whether gifting crypto is a taxable activity. Let us check. 

What Is Crypto Gift Tax?

Cryptocurrency is a digital asset. In the United States, for tax purposes, digital assets are considered property, not currency. It means that the general tax principles for property transactions apply to cryptocurrency transactions. Cryptocurrency holders are obliged to report all income gains or losses from crypto transactions on their federal income tax return. 

Crypto gift tax refers to the rules and obligations that apply to the person who gives a gift in cryptocurrency, without receiving anything of equal or above value in return. Even though the IRS treats crypto as property for tax purposes, in the United States, cryptocurrency gifting has reporting implications, but not an immediate tax liability. 

According to the current tax law, cryptocurrency gifts are not taxable events for donors and recipients in the United States, but additional requirements and filing are applied when the giver gifts more than $19,000. Based on the latest regulations, an annual gift tax exclusion is available in the United States, meaning that you can gift up to $19,000 per person per year without paying gift tax.  If your crypto gift exceeds the $19,000 limit, you have to pay tax and must file IRS Form 709 (Gift Tax Return).    

How Does Tax On Crypto Gifts Work In The United States?

In the United States, for the recipient, crypto gifts are not immediately taxable, but the giver is responsible for possible gift tax reporting if the permitted value exceeds. The recipient is not fully excluded from taxation; they may owe capital gains tax when they eventually sell the asset.  Here is the explanation for the crypto gift tax and how it impacts both giver and receiver. 

For The Gifter

For the gifters, crypto gifts under the annual limit of $19,000 per recipient per year in 2025 are tax-free. They do not want to report the transactions under the limit, and there will not be any immediate tax implications. If the annual limit is exceeded, gifters must file IRS Form 709, United States Gift Tax Return, to report the transaction. Filing the IRS Form 709 does not mean that the gifter owes tax immediately; the amount gifted exceeding the annual limit only starts to count against the user’s lifetime gift and estate tax exemption, which has a high threshold of $13.99 million in 2025. The crypto gift tax, based on IRS Form 709, is triggered only when lifetime or posthumous gifts surpass $13.99 million. For gifters, there will not be any capital gains tax at the time of gifting since the act of gifting is not considered a sale or exchange, so the giver does not have a capital gain or loss at that moment. 

For The Recipient

In the United States, receiving crypto gifts is not a taxable event for the recipient at the time of receipt. Recipients do not owe income tax on the value of cryptocurrencies when they receive them. Recipients owe inherited cost basis tax when they eventually sell the crypto they received. The cost basis tax is owed when he sells, swaps, or spends the gifted crypto; the tax is imposed because, technically, he inherits the donor’s original cost basis and holding period. Recipients will owe future capital gains tax on any profit realized from the donor’s original purchase date until the time they dispose of the asset. Capital gains tax is calculated based on the time of possession. If the receiver holds the asset for a combined period of over a year, they are qualified for lower long-term capital gains tax rates. If they held crypto for a year or less, the gains will be taxed at the higher, ordinary income tax rates.  

Special Situations Of Crypto Gifting In 2025

U.S. crypto tax rules in 2025 recognize that certain exceptions may modify how crypto gifts interact with the tax system. Here are some conditions under which tax exceptions and rule changes are considered. 

• Gifting crypto to a U.S. citizen spouse is generally unlimited and is not subject to the crypto gift tax.
• Gifting to a non‑citizen spouse has a special annual limit and probably requires Form 709.   
• Gifting crypto to foreign individuals requires a U.S gift tax filing by a U.S. donor. 
• Foreign recipients are subject to separate tax or reporting rules in their own country.
• Gifts of crypto to qualifying U.S. charities are not subject to gift tax.
• Crypto donations to charities are subject to income tax deduction and documentation requirements.

These are the special categories included in the U.S tax gift rules. These special categories matter because they can change whether there is a dollar limit, shift the focus from gift tax to income‑tax rules, etc. 

The Bottom Line 

We understand that crypto gifts are generally not taxable in the United States, except under certain conditions and scenarios. Before gifting crypto to each other, both the givers and recipients should keep some instructions in mind. If you are into it, maintain detailed records of transactions to ensure compliance. The key documents you need to keep are the names of both parties, the date and type of cryptocurrency transferred, the fair market value in the U.S. dollar on the date of the gift, and the donor’s original cost basis and acquisition date. Adhering to financial rules is important; if you don’t follow them, you will be fined and punished. For crypto transactions and complex gifting procedures, it is highly recommended to consult and seek advice from a tax professional or financial expert.