Crypto Gift Tax Rules in the US

The three facts

Those four cells cover the overwhelming majority of crypto gifts. Somebody gives their sibling $500 of Ether; nobody files anything, nobody owes anything today, and the sibling carries the giver's purchase price forward. Simple.

The complications arrive in three places: gifts above the exclusion, assets that have fallen in value, and the very common confusion between gifting crypto and spending it.

The annual exclusion, precisely

The federal annual gift tax exclusion for 2026 is $19,000 per recipient. Some details that matter:

• It is per recipient, not per giver. Giving $19,000 each to four children is $76,000 of gifts with no return required.
• It resets each calendar year. A gift on 31 December and another on 1 January use two different years' exclusions.
• Married couples can elect to split gifts, effectively doubling the amount to a single recipient — but electing to split requires filing Form 709 even when no tax is due.
• Value is measured at fair market value on the date of the gift. For crypto that means the price at the time of transfer, which for volatile assets is worth documenting with a timestamp.
• Gifts to a US-citizen spouse are generally unlimited under the marital deduction. Gifts to a non-citizen spouse have their own, larger-but-finite annual limit.

Carryover basis and the loss trap

This is the part that generates unpleasant surprises years later, so it is worth being precise.

When you gift crypto, the recipient takes your cost basis and your holding period. If you bought 1 ETH for $1,500 four years ago and gift it today, the recipient's basis is $1,500 and their holding period already exceeds a year — so a sale is long-term from day one. That is genuinely valuable, and it is why gifting appreciated crypto to somebody in a lower tax bracket is a recognised planning move.

Now the exception. If the asset's fair market value on the gift date was below your basis, a split rule applies:

The practical consequence: gifting an asset at a loss wastes the loss. If you hold crypto below your purchase price and you want the tax benefit, the usual answer is to sell it yourself, realise the loss, and gift the cash. Whether that is right for you is a conversation with your accountant, but you should know the option exists before you transfer.

When you file Form 709

Form 709 — the United States Gift (and Generation-Skipping Transfer) Tax Return — is the giver's return, not the recipient's. You file it when:

• A gift to any one recipient exceeds the annual exclusion for that year;
• You and a spouse elect to split gifts, even if no individual gift exceeds the exclusion;
• You give a future interest in property, regardless of amount;
• You make certain gifts to a non-citizen spouse above the applicable limit.

It is due with your income tax return timing — generally 15 April of the following year, extendable. Filing it is usually an accounting exercise rather than a payment event, because the excess draws down your lifetime exemption.

For crypto specifically, be ready to describe the asset, the amount, the transfer date and the fair market value at that moment. A transaction hash and a timestamped price screenshot make this straightforward; reconstructing it eighteen months later does not.

Spending crypto is not gifting crypto

This is the single most consequential distinction on the page, and it is the one most often missed by people who buy gift cards with crypto.

• Gifting crypto — transferring the asset to another person for nothing in return. Not a disposal. No gain realised. Carryover basis.
• Spending crypto — exchanging it for goods, services, or a gift card. This is a disposal. If the asset appreciated since you acquired it, you realised a gain, and it is reportable — even if the purchase was a $40 grocery card.

So the two obvious-looking routes to the same present have different tax consequences. Sending your sister 0.005 BTC is a gift with no disposal. Buying her a $500 Amazon card with the same 0.005 BTC is a disposal that realises whatever gain has accrued.

The records to keep

Related: how to gift crypto for the practical handover, gifting to a child for custodial arrangements, and anniversary gifts for the spousal cases.