Donating Complex Assets: Real Estate, Private Stock, and Cryptocurrency

Overview

Donating complex assets—real estate, private stock, and cryptocurrency—lets donors convert illiquid or appreciated property into philanthropic impact while often reducing taxes. Unlike straightforward cash gifts, these donations require valuation, legal transfer steps, and tax reporting. When structured correctly, donors may avoid paying capital gains tax on appreciation, claim a deduction for fair market value, and help charities receive high-value resources they might otherwise be unable to buy.

(For IRS rules on charitable contributions and valuation guidance see the IRS charitable contributions page and Publication 561.) IRS Charitable Contributions (IRS)

Why donors consider complex asset donations

• Tax efficiency: Donating appreciated property held more than one year generally avoids capital gains tax and may generate a deduction equal to fair market value (FMV), subject to AGI limits (typically 30% of AGI for gifts of appreciated property to public charities). (IRS Pub. 526)
• Liquidity relief: Donating a burdensome asset (a rental with high maintenance costs or a timeshare) can remove future cash drain.
• Philanthropic leverage: A single high-value asset can fund large, mission-driven projects for nonprofits.

In my practice advising high-net-worth clients, I regularly see meaningful tax savings when timing and documentation are correct. But mistakes — poor valuation, incomplete transfer, or choosing a charity that cannot accept the asset — can negate benefits or create compliance headaches.

Key IRS rules and thresholds (2025)

• Holding period matters: If an asset is long-term (held > 1 year), donors generally may deduct the FMV. If held ≤ 1 year, deduction usually limited to donor’s basis (cost) in the property. (IRS Pub. 526)
• AGI deduction limits: Long-term appreciated property to a public charity — generally limited to 30% of your adjusted gross income (AGI). Excess may carry over for up to 5 years. For private foundations the limit is lower (usually 20% of AGI). See the IRS charitable contributions rules and our article on Charitable Contribution Carryover Rules.
• Reporting noncash gifts: Noncash gifts require specific reporting. For items over $500 you must itemize and complete Form 8283; for property (or groups of similar items) with a claimed deduction over $5,000, a qualified appraisal and Section B of Form 8283 are typically required. (IRS Form 8283)

FinHelp internal resources: How you document a noncash gift matters — see our guide on How to Document Charitable Gifts for Maximum Deduction and the FinHelp reference on Form 8283 — Noncash Charitable Contributions.

Asset-specific considerations and steps

Below are practical steps and issues for real estate, private stock, and cryptocurrency donations.

1) Real estate

• Typical structure: Donor conveys title to the charity or funds a real-estate-specific vehicle (e.g., a charitable remainder trust or donor-advised fund) that sells or operates the property.
• Valuation: Obtain a qualified appraisal when the claimed deduction exceeds $5,000 — IRS Publication 561 explains acceptable valuation methods. For real estate, appraisal must support FMV as of the donation date.
• Title and environmental risk: Charities often require environmental site assessments (Phase I/II) and proof of clear title. Many charities will not accept properties with significant environmental liabilities. If the charity cannot take property, alternatives include selling the property and donating proceeds through a DAF or CRT.
• Tax mechanics: If the property is long-term appreciated property and accepted by a qualifying charity, the donor generally deducts FMV up to the AGI limits and avoids capital gains taxation.

Practical example from my advising: A client donated an out-of-state rental with rising maintenance costs. Because the local charity accepted and sold the property, the client avoided capital gains tax and used the deduction in a high-income year. Environmental due diligence and a qualified appraisal were required before closing.

2) Private (closely held) stock

• Transfer complexity: Private stock typically requires board and company procedures: transfer restrictions, right-of-first-refusal, or approval by other shareholders. Not all charities can accept restricted stock — many prefer liquid shares.
• Valuation: A qualified appraisal and documentation of the company’s most recent valuations are essential. For stock in small businesses, valuation often hinges on company financials, recent financing rounds, and market comparables.
• Options for illiquid equity: If the charity can’t accept the stock, consider a charitable remainder trust (CRT) or donor-advised fund (DAF) that receives and later liquidates the shares (but note tax and timing implications). A CRT can provide an income stream to the donor (or beneficiaries) and ultimately deliver the remainder to charity while potentially deferring capital gains.

3) Cryptocurrency

• IRS character: The IRS treats cryptocurrency as property for tax purposes (IRS Notice 2014-21). Donating crypto directly to a qualified charity is generally treated like donating other appreciated property if the asset was held long-term.
• Valuation and timing: Deduction equals the crypto’s FMV at the donation time, provided long-term holding. Document the wallet address, transaction ID, transfer date/time, and an acknowledgement from the charity. For larger gifts, the charity may ask for a qualified appraisal or additional documentation.
• Platforms and acceptance: Many charities use cryptocurrency donation processors (e.g., The Giving Block) or dedicated wallets to accept transfers. Confirm the charity’s ability to accept and liquidate crypto — some smaller nonprofits cannot.

In one client case I advised, donating Bitcoin directly to a university’s gift office avoided a large capital gains tax hit. The donor documented the blockchain transfer and obtained a contemporaneous acknowledgement of FMV from the charity for tax reporting.

Documentation checklist (practical)

• Written acknowledgement from the charity that includes: date, description of property, statement whether any goods or services were provided.
• Qualified appraisal for any noncash gift with a claimed deduction > $5,000 (and Form 8283 Section B signed by the charity when required).
• Title and environmental documents for real estate; board/transfer documents for private stock; blockchain transaction records for crypto.
• Evidence of holding period (statements, transaction history) to support long-term status.
• Keep records for at least 3–7 years and consult your tax advisor before filing.

Common pitfalls and how to avoid them

• Overvaluing assets: Using subjective or inflated appraisals invites IRS scrutiny. Use credentialed appraisers and contemporaneous documentation (IRS Pub. 561).
• Donor assumes charity can accept the asset: Always confirm acceptance in writing before starting legal transfers. If a charity declines, have a backup plan (DAF or CRT).
• Incorrect reporting: Missing Form 8283 or failing to attach required appraisals will delay or reduce deductions. For guidance see our Form 8283 resource page.

Alternatives and planning tools

• Donor-Advised Funds (DAFs): DAFs can accept complex assets, liquidate them, and allow you to recommend grants. Useful when the recipient charity cannot accept a specific asset.
• Charitable Remainder Trusts (CRTs): CRTs can sell appreciated assets without immediate capital gains tax, provide an income stream to you, and deliver the remainder to charity. Consider our deep dive on Charitable Remainder Trusts for mechanics and tax effects.
• Donor designations: For concentrated stock positions close to liquidity events, phased gifting across tax years can smooth AGI limits and maximize deduction utility.

Working with professionals

Complex asset donations best succeed with a multi-disciplinary team: tax CPA, estate attorney, and appraiser (and sometimes environmental counsel or corporate counsel for private equity matters). In my experience coordinating these professionals early (60–120 days before transfer) prevents last-minute surprises.

Quick FAQ (practical answers)

• Do I pay capital gains if I donate appreciated property? Generally no, if you donate long-term appreciated property directly to a qualifying public charity you avoid capital gains and may deduct FMV (subject to AGI limits). (IRS Pub. 526)
• What if my deduction is limited by AGI caps? You can carry forward excess contributions for up to five years. See our article on Charitable Contribution Carryover Rules.
• Can I donate crypto and get FMV deduction? Yes, when you donate crypto held >1 year directly to a qualified charity you can generally deduct FMV and avoid gain taxation; document the transfer carefully (IRS Notice 2014-21).

Final considerations and disclaimer

Donating complex assets is a powerful philanthropic and tax-planning tool, but it requires proper valuation, documentation, and legal transfer. Start early, confirm acceptance with the charity, and work with a qualified tax advisor and attorney. The material above is educational and not personal tax advice—consult your CPA or attorney for decisions that affect your tax or legal position.

Author note: In my 15+ years advising donors, the most successful gifts were those coordinated months in advance with appraisals and a clear acceptance letter from the charity. That preparation both protects the donor and maximizes the gift’s value to the nonprofit.

Authoritative resources

• IRS — Charitable Contributions and Publication 526: https://www.irs.gov/charities-non-profits/charitable-contributions
• IRS Notice 2014-21 (cryptocurrency tax guidance) and Publication 561 (valuation guidance)