Giving tips and gifts have certain limitations and they vary from country to country. Furthermore, it is legal to gift bitcoins. However, the receiver has to pay tax if the gift exceeds the non-taxable amount. All you have to do is to calculate the market value of the bitcoins. This will tell you either your gift is taxable or not.
And this calculation is done based on the current market value. For example, when the giver sends you the gift, the market value was higher. However, it went down because of certain circumstances. So what you have received is not equal to give tax onto. Therefore, you won’t pay the tax on this amount.
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Real-time trading signals
So it is more about the timing of sending and receiving gifts if you want to prevent tax application. The best way to do so is to analyze the trading signals of Bitcoin. This is done by special software like cryptorevoltpro. You can visit this site for more information.
With the help of such software, you can save a lot of your time. If you are interested in doing cryptocurrency trading, the first thing that you need to do is proper analysis. However, it takes so much time.
Therefore, developers have created such software that does the task for you and provides you with real-time trading signals of Bitcoin and other cryptocurrencies. All you have to do is to follow these trading signals and do profitable trades.
What comes under taxable gifts?
img source: bitcoin.com
Although the tax laws differ from countries to countries but according to the law of the United States,
- Your money, goods and any kind of service that you earn after working or doing business or investment are taxable. All of these come under your income therefore, you are supposed to pay tax on them.
- Even if you gift some of this amount to anyone of your friends or family members, it is yours. You have earned it. So once you earn a specific amount of money, you have to pay tax on it. Irrespective of your use of it. If you buy a car or some hundreds of pounds of jellies. It is not the business of the State. You earned it, so you will pay the tax on it.
- Although gifts do not come under this category. But there is a limit to that. If your gifts exceed $13000, the receiver has to pay tax on it. So if one of your friends buys an expensive car for you, you will have to pay tax on it. Even though you did not buy it by yourself. So Bitcoin also comes under this categorization. If the gift amount exceeds the acceptable amount, the receiver will pay tax on it.
- The only exception is for the registered charity organizations. If you earned a huge sum of money and you are supposed to pay tax on it. But you decide to give some of it to the charitable organization (registered), you do not have to pay tax. But only on the amount that you have given as a charity. The remaining will be taxable. However, you cannot give more than 50 percent of your money to charity.
- The same rule applies to Bitcoin charity. If you are giving it as a gift to a charitable organization, you do not have to pay tax. Neither are you eligible for that nor the organization?
How to send Bitcoin as a gift
So it is clear that you can legally send Bitcoins as a gift to anyone you want. But how to do it? There are several ways to do it. So let’s have a look at some of these;
1. Paper Wallets
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All the information is present on the paper and you can give it to someone as a gift like real money. The receiver will know what he needs to do to spend that money. Furthermore, the key that the receiver needs to make a transaction is also printed on paper. In short, the receiver won’t have anything to ask from the giver.
2. Gift cards
If you have been using Bitcoin and e-wallets, you might already know about the gift card feature. It will let you send Bitcoins as a gift to your friends or family. All you need to do is to fill out the form on the online portal. After you are done doing that, a gift card will be sent to the receiver in their mail.
The receiver can cash out the gift card anytime they want. The redeemed amount will be according to the exchange rate of cash-out time. Furthermore, the receiver will also get the procedure of opening up his bitcoin wallet.
3. Hardware wallets
Just like e-wallets, there are hardware wallets too. Bitcoin is an amazing thing to have in our world. You can just store the key in a USB drive or use a hardware wallet. Now you can give it to someone as a gift. Hardware wallets are becoming a trendy thing for bitcoin users because they secure your e-wallet in offline mode.
Furthermore, they are water-proof and also viruses cannot damage them. In addition to this, they also support multiple signatures. So you can easily do transactions. Therefore, they are quite convenient when you need to send or receive virtual money from someone. They also have the QR code scanning camera and storage device backup.
4. Physical coins
Although Bitcoins are available in soft form there are physical options available for them. There are certain collectible things like Casascius and Denarium coins, which are in gold, silver and brass material. Furthermore, they have limited editions. So you can send these coins and collectibles as a gift to someone. And if the receiver wants to cash out their gifts, they can do so.
You might think that they just showcase objects, which is not true. Such gifts come with a Bitcoin address and also the key. So when you want to redeem Bitcoins, you can use them.
