A popular cryptocurrency trader under the Twitter pseudonym “Sicarious” donated a portion of its crypto profits to buy Christmas presents and other utilities for underprivileged children.The donations included $7,250 worth of livestock, clean water, Bibles, emergency food for Compassion International, a child sponsorship nonprofit, and another $1,500 to purchase and donate toys for kids — who would otherwise do without at Christmas — via Toys for Tots Foundation.Shorting the crypto price declinesSicarious also shared the screenshot of its profits and loss statements that showed that it had made nearly $6,500 and $27,500 in gains by shorting Terra (LUNA) and Avalanche (AVAX) recent price drops, respectively. That left the trader with enough leftover profits to continue its donation spree until the end of this year.Walmart is going to need more LEGOs… pic.twitter.com/k5X19VxOZo— Sicarious (@Sicarious_) December 13, 2021In detail, Sicarious announced on Dec. 5 that it would donate any profits made until the end of 2021 for children-related causes as a part of a so-called “Christmas challenge.” In announcing so, the anonymous trader put $100,000 into its FTX account, adding that if it nukes the amount, it would still donate whatever it can afford.A screenshot taken on Dec. 5 from Sicarious’s account. Source: TwitterOn Dec. 15, Sicarious closed another AVAX short in profits and used about $2,000 worth of proceeds to benefit a local food pantry.The trader’s initiative also inspired others to commit their realized crypto profits to causes. For instance, another Twitter user “Aeroplaine” claims to have deposited $50,000 into a dYdX perpetual exchange account, stating that it would donate all the gains to charitable causes in Malaysia.A good-hearted crypto tax strategy, meanwhileWhile Sicarious’s citizenship remains unclear, the copies of the traders’ bills and mention of the retail store Walmart in its tweets indicate that it lives in the U.S., a country with one of the most stringent crypto tax laws.The U.S. Internal Revenue Services (IRS) classifies cryptocurrencies as property. Meaning, if one’s crypto investments increase in value, s/he would need to pay a capital gain tax when they spend it. That also means keeping a tax record in check on a $2 coffee bill if paid via crypto.But donating crypto to charity somewhat allows taxpayers to brush off IRS’s tax-filing process. And since donations, on the whole, are not taxable events, one can offload their crypto profits as donations and deduct the same amount from their net tax liabilities in the financial year.But there remains a big takeaway: whether to first secure the crypto profits in cash and then donate or to pledge the money in crypto. The Giving Block, a crypto donation service, provided an answer back in 2020. The firm noted that cashing out crypto first would leave traders with a higher capital tax liabilities while donating directly via crypto would mean no tax responsibilities for the donor. Comparing crypto tax methods. Source: The Giving BlockThe direct-crypto-donation strategy seems to have worked well so far. For instance, Fidelity Charitable, the U.S.’s largest grantmaker, received over $274 million in cryptocurrencies this year, according to a company’s spokesperson quoted in the Los Angeles Times. Related: The Giving Block raises $2.4M for charity on ‘CryptoGivingTuesday’The amount came out to be almost four times higher than 2017’s peak of $69 million.Engiven, a crypto-enabled donation platform, also reported last month that it processed a $10 million Bitcoin donation to a faith-based organization.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.Čítaj viac
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