Shortly before the FY 2017 tax filing deadline, Ripple contributed approximately $29 million worth of its XRP to DonorsChoose, a 501(c)(3) nonprofit organization. Depending on how the Internal Revenue Service approaches XRP, Ripple – the effective creator and steward of the tokens – could be eligible for a large tax deduction, though the implications of such a deduction are concerning.
The Good Press
A few weeks ago, "Late Show" host Stephen Colbert recognized Ripple for gifting[1] approximately $29 million worth of XRP[2] (the native currency of the Ripple Ledger) to DonorsChoose, a New York-based nonprofit organization that facilitates donations to public school classroom projects. In one fell swoop, Ripple fulfilled more than 35,600 project requests[3], and thereby ensured that thousands of teachers across the country had the supplies they needed for their students. According to the New York Times[4], Ripple's XRP donation was "by far the largest ever received by the charity."
Now that the fairytale dust has settled and the taxman cometh[5], I found myself wondering whether Ripple could claim a tax deduction for its charitable contribution. After all, charitable contributions made in bitcoin are tax-deductible. Could it be the same for XRP?
ETHNews reached out to Ripple to ask whether the company plans on making a tax deduction for its XRP charitable contribution. Unfortunately, despite repeated requests for comment and numerous attempts to reach executives, the company did not reply.
The Donation
ETHNews did hear from Chris Pearsall, vice president of brand and communications for DonorsChoose, who shed some light on the large XRP donation. He explained that over a two-week stretch prior to the announcement on March 27, DonorsChoose converted the XRP donation to US dollars
