A Brief Overview of the Estate and Gift Tax Considerations Associated with the Transfer of Cryptocurrency
By Anthony Diosdi Federal law imposes a transfer tax upon the privilege of transferring property by gift, bequest or inheritance. This transfer tax takes the form of a gift tax in the case of completed lifetime gifts and an estate tax in the case of property owned by the decedent at the time of death. Since the Internal Revenue Service (“IRS”) treats cryptocurrency as property for federal tax purposes, the federal estate and gift tax is imposed on any cryptocurrency transferred by gift or bequest. Gift and estate taxes are computed on the progressive unified rate schedule set forth in Section 2001 of the Internal Revenue Code with rates as high as 40 percent. As of 2022, the lifetime estate and gift tax exemption for U.S. domiciled single filers is…