Donating bitcoin: when does the full market value count, when only the purchase price?

The information provided in this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high degree of risk. Always conduct your own research.A bitcoin donation to a charitable organisation is deductible as a donation in kind, and the donation itself produces no taxable gain. The size of the deduction turns solely on whether a sale would have been taxable on the day of the transfer.A bitcoin donation to a charitable organisation is tax-deductible in Germany, and it counts as a donation in kind. How much you may deduct turns on a single question that is written into the law and that hardly anyone else mentions: would a sale of this bitcoin have been taxable at the moment of the donation? If the answer is no, because the one-year holding period has elapsed, you may use the fair market value, that is the price on the day of the donation. If it is yes, because you bought the bitcoin only eight months ago, the deduction is capped at the carried-forward acquisition cost, meaning what you paid. On a position that has quadrupled, that is a difference of a factor of four, purely because of the date. This rule is in section 10b...