Cryptocurrency

An Appreciated Asset, an Appreciated Gift

If you own Bitcoin or another digital currency, it may now be worth more than you paid for it. Bitcoin is one of the best-performing assets over the past five to 10 years. Many investors have a very low cost basis and should evaluate the tax implications before cashing in.

One impactful option that can save you on taxes is using cryptocurrency to support the University of Massachusetts Amherst and our students.

How it Works:

  1. Discuss using your cryptocurrency to make a gift to UMass Amherst with your financial advisor to see if it is the best option for you.
  2. Transfer your cryptocurrency. Contact Joseph K. Jayne at gift.planning@umass.edu or 413-577-1418 to learn how to make the transfer via our online wallet tool.

Your Benefits

When you give Bitcoin or another cryptocurrency you have held for more than a year to support UMass, you:

  • Qualify for an income tax deduction for its fair market value, up to 30% of your adjusted gross income (AGI) with a five-year carryover.
  • Avoid the capital gains tax you would have paid if you sold it.
  • Make an impact on UMass Amherst students today.

An Example of How it Works

MANJeff purchased Bitcoin years ago for $400,000 that today is worth $1,000,000. He wants to make a gift to support his alma mater, UMass Amherst so he spoke with his financial advisor and decided to use his Bitcoin to fund his gift.

By giving his Bitcoin directly to UMass Amherst instead of selling it and then donating the money, Jeff does not have to pay long-term capital gain taxes, which would have been $120,000. He is also eligible for an income tax charitable deduction of $1,000,000 in the year he makes his gift. He is happy to know that UMass Amherst students will benefit from his generosity.

Next Steps

  1. Seek the advice of your financial or legal advisor.
  2. Contact Joseph K. Jayne at 413-577-1418 or gift.planning@umass.edu to learn more about using cryptocurrency to support UMass Amherst and our students.
  3. If you make a gift to the University of Massachusetts Amherst, please use our legal name and federal tax ID.

Legal Name: University of Massachusetts Amherst
Address: 134 Hicks Way, Amherst, MA 01003-9270
Federal Tax ID Number: Please contact us for our federal tax ID number.

A charitable bequest is one or two sentences in your will or living trust that leave to the University of Massachusetts Amherst a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I designate _________________ to the University of Massachusetts Amherst at Memorial Hall, 134 Hicks Way, Amherst, MA 01003-9270. I request this gift be used for __________________ (for instance, a specific department, college, school or program, a scholarship, or for general purposes of the campus)."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to UMass Amherst or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to UMass Amherst as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to UMass Amherst as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and UMass Amherst where you agree to make a gift to UMass Amherst and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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