Bitcoin core non-profit gets approved for tax exemption, perks for donors
501(3)(c) status boosts the project’s legitimacy as well as its efficiency in using donations.
A new non-profit aiming to fund Bitcoin development education and research has been approved for special tax status, conferring benefits on donors.
Brink, which launched in the fall, has been approved as a 503(c)(3) organization according to a Feb. 10 blog post. The status both exempts Brink from federal taxes and provides some interesting benefits to donors, especially considering their use of Bitcoin.
Donations to 503(c)(3) organizations in the U.S. have always been an important tax write-off, but considering the long-term confusion over the IRS seemingly asking for Bitcoin users to pay capital gains taxes on any use of Bitcoin as a payment. In its announcement, Brink says that it offers an alternative:
“Donations of long-term appreciated assets like Bitcoin generally don’t incur capital gains tax and can be claimed as an income tax deduction for the full fair-market value.”
Headed by Bitcoin core developer John Newberry, Brink runs fellowship and educational programs for new devs. Newberry told Cointelegraph that Brink had looked for the designation since its beginning: “We always planned to be a 501c3, and our corporation bylaws are completely consistent with that designation.”
The legal status as a 503(3)(c) non-profit will also open Brink up to new disclosure requirements, which Bitcoin’s innate transparency may make simpler.
However, the BTC address that Brink advertises on its Twitter feed appears to be unused. Newberry told Cointelegraph that the wallet was for a one-time donation, saying that those interested can now donate in Bitcoin and fiat here. The firm’s Bitcoin donation window actually leads to an Open Node API. Open Node offers instant conversion from crypto to fiat, which raises the question: Does Brink not actually hold BTC donations in BTC?
Newberry did not respond to Cointelegraph’s request to specify a wallet address.
The confusion over having to pay capital gains taxes on any payment in Bitcoin had led many to call for a de minimis on the value of those payments before the IRS can come for them.
