This year’s hot gift-giving trend is to send crypto to family and friends. Last Thursday, popular investment app, Robinhood (NASDAQ:HOOD), announced that beginning Dec. 22 its customers will be able to select among seven different cryptos and send them as gifts to family and friends — or to mild-mannered cryptocurrency commentators who happen to write for The Ascent (hint).
To use the crypto gift feature, you can send as little as $1 worth of seven digital assets including Dogecoin, Ethereum, and Bitcon. You can also customize an e-gift card with festive, fun images that include the amount of the gift and space for a holiday message. The link to access the funds is then sent directly to the recipient via email or text. According to the website, the service is free of commissions and fees.
Once a gift is sent, the recipient has 14 days to accept their new crypto gift. If they don’t, you won’t be charged. Regardless, the website advises you to make sure your Robinhood account has sufficient funds available before sending your gift and during the 14-day redemption period. Also, pre-plan that it could take three to five days for your initial deposit to settle in the app account.
If you send the gift to a Robinhood customer, they will simply be redirected to the app to claim it, and if they’re not, they’ll be automatically directed to a sign-up page and claim it then. Similar kinds of crypto gift-giving services are already available on Coinbase (NASDAQ:COIN), PayPal (NASDAQ:PYPL), and Block.
On The Flipside
- A few things to keep in mind regarding this service is that there can be tax considerations for both the giver and receiver.
- When stocks are given as gifts, the IRS usually makes the donor pay the gift tax — and those rules may apply to crypto gifts.
- The IRS also classifies crypto assets as property, which trigger short- or long-term gains when they’re sold.
Why You Should Care?
If you give or get crypto gifts this holiday season, be sure to check with a crypto tax expert or accountant to avoid unnecessary interest and penalties around tax time.
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