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The types of gifts people enjoy receiving change as they move through life. A stuffed animal might become a prized possession for a toddler, whereas older kids might enjoy sports equipment. Teens and adults alike could get a kick out of receiving the latest electronic device. Physical gifts like these have varying degrees of staying power, often becoming obsolete or wearing out in a few years. But if you’re hoping to make a longer-term impact on your gift recipient’s life, you might consider giving a digital asset as an investment.

Digital assets—from traditional investments such as stocks and bonds to newer alternatives like cryptocurrency and non-fungible tokens (NFTs)—represent a unique type of financial gift because they have the potential to appreciate over time. This may be as close as you’re going to come to the proverbial gift that keeps on giving, as digital assets are among the only types of gifts with some likelihood of benefitting the future financial life of the person who receives them.

What’s more, because we’re talking about items that you purchase and hold in online accounts, the process of giving a digital asset as a gift is generally quick and easy. Depending on the type of asset, you will often be able to transfer your gift directly from your account to the account of your recipient.

Key Takeaways

  • Digital asset investments make a great gift because they have the potential to appreciate over time, and quick online transfers make it easier than ever to give such investments as a gift.
  • It’s important to account for the tax implications of your financial gift—both for you and for the gift recipient.
  • You can give many types of digital assets—from traditional investments like stocks and bonds to newer alternatives like cryptocurrency and NFTs—but finding the best gift will depend on the financial goals you’d like to help the recipient achieve.

Why Digital Assets Make a Good Gift

There are plenty of reasons that you might consider giving a digital asset as a gift. This type of present may be ideal for someone in your life who is in the early stages of their journey with investing and personal finance. The gift of a digital asset could be a great way to introduce younger people to the value of investing for the future.

As they gain a foothold in the investment world, the recipient of your digital gift also will become the owner of an asset that has the chance to grow in value. So, although it may not generate the same immediate excitement as, say, the latest video game console, the gift of a digital asset can provide extended benefits throughout the recipient’s financial life.

Giving the gift of a digital asset also means that you can forget about things like wrapping paper and shipping costs. You generally can give this type of gift through a fast and simple online transaction. Rapid and painless online transfers mean that digital assets are even suitable as a last-minute gift idea.

Tax Implications of Gifting Digital Assets

Whether it’s part of a premeditated plan to contribute to your recipient’s financial future or you’re simply looking for a useful and easily transferrable present, there are some things you should keep in mind before you give digital assets as a gift. Like any other financial decision, giving assets as a gift could have repercussions on Tax Day. It’s important to consider the tax implications of your gift—both for you and for your recipient.

The first tax issue to keep an eye on is that if you give somebody a gift worth more than a limit set by the Internal Revenue Service (IRS), you will be on the hook for paying the gift tax. However, for the 2022 tax year, gifts are subject to this tax only if they are valued at more than $16,000, or $32,000 if it’s a married couple giving the gift. If you give someone a gift that exceeds the gift tax limit, you will need to report it to the IRS using Form 709.

In addition to the annual gift tax exemption, there is a lifetime gift tax exclusion amount. For 2022, this lifetime limit is set at $12.06 million. If you have given gifts worth more than this amount over the course of your life, you will be responsible for paying the federal gift tax. These annual and lifetime limits provide you some wiggle room to give many types of digital assets as a gift—even a rather generous one—before you need to worry about triggering gift taxes.

Regardless of whether your gift is subject to gift taxes, the recipient will not need to pay income taxes on the amount they receive. However, when you give somebody a digital asset as a gift, it does come with a tax-related catch. The gift recipient will be responsible for paying capital gains taxes when they eventually sell the asset. The recipient takes over ownership of the gifted asset with the same cost basis. In other words, your gift recipient’s capital gains will be calculated based on what you originally paid for the asset.

If a digital asset that you own has gained value over time, giving it as a gift can provide you with a tax benefit, as you will avoid paying taxes on your capital gains.

If the digital asset you’re gifting is worth more than when you bought it, remember that the cost basis remains the same when your recipient takes ownership of the asset, so you are essentially passing on that capital gains tax liability along with the gift. Therefore, if you’re going to give this type of gift, you should be sure the recipient understands that some strings are attached.

Types of Digital Assets to Give as a Gift

If you’ve decided to give a gift with the power to enhance someone’s financial future, the next step is determining the best type of digital asset to transfer to your recipient. There are many factors to consider—including the tax considerations described above, the makeup of your own investment portfolio, and the goals that you hope to help your recipient achieve. Let’s look at some of the common asset classes that may be suitable to give as a digital gift.


Stocks are an interesting gift idea because, in addition to their potential financial benefit, you can gift shares in a company that matches your recipient’s hobbies, interests, or values. It’s straightforward to give stock as a gift—you can transfer shares from your brokerage account to your recipient’s account, use an online app specializing in stock gifting, or sometimes even gift shares directly through the company.

Recipients of stock gifts will need to have their own brokerage account where they can hold the asset. Keep in mind that, if everything goes as planned and the gifted stock gains in value, recipients will owe capital gains taxes when they eventually decide to sell the shares.


When you give a bond as a gift, your recipient technically becomes a creditor or lender to the issuing corporation or government. On a more practical level, the gift of a fixed-income investment can teach recipients about managing money while possibly providing a nice boost to their financial future. If you are looking for a bond to give as a gift, you have no shortage of options, but with corporate bonds generally requiring a steep minimum investment, many gift givers turn to U.S. savings bonds. Because they are backed by the U.S. Treasury, savings bonds are a trustworthy investment, making them a less risky financial gift than, say, NFTs.

In the case of gifting savings bonds, the digital transaction is also fairly simple—you can buy a savings bond for as little as $25 from the TreasuryDirect website and then transfer the asset to the recipient’s TreasuryDirect account.

Exchange-Traded Funds (ETFs)

In contrast with stocks and bonds—which represent a stake in a particular company or the debt issued by a specific issuer—an exchange-traded fund (ETF) is a pooled security, made up of a basket of different investments. When you give an ETF as a gift, your recipient gains exposure to a defined slice of the financial markets. Given the wide variety of ETFs that are available, you should be able to find a fund that is suitable for helping your gift recipient achieve any type of financial goal. Similar to stocks, you can gift ETF shares by transferring them from your brokerage account, using an online gifting platform, or directly through some ETF issuers.

Gold or Silver

Gold and silver may not immediately come to mind when you think of digital assets, but as investments go, precious metals can be a great store of value and often provide benefits when the economy is unstable. If you want to give a digital gift of investment exposure to gold or silver, you may again turn to ETFs or shares in mining companies that stand to benefit from rising precious metals prices.

However, you may be more drawn to the idea of giving physical gold or silver as a gift. In that case, you can give bullion, coins, or jewelry. Even though those are tangible assets, you can shop online for gold and silver gifts from licensed retailers. If you are planning to gift physical gold or silver, keep in mind that there are costs associated with delivery, storage, and insurance.

You may have noticed that one asset class is conspicuously absent from this list of digital assets to give as a gift: mutual funds. That’s because the process for gifting mutual funds tends to be cumbersome.

If you already own a mutual fund that you would like to give to someone as a gift, you will often have to sell the fund and transfer the value to the recipient. Using this type of transaction to gift a mutual fund could trigger significant capital gains taxes.


By now, you’ve almost certainly heard stories about the cryptocurrency markets and their tumultuous volatility. While the debate rages on about the long-term viability of cryptocurrency, the asset class remains a speculative investment and a way of making certain digital payments. If you’re comfortable with high levels of risk, the ubiquity of these digital assets has made them increasingly easier to buy and hence to give as a gift.

You can buy assets through a cryptocurrency exchange and then transfer them to the wallet of your recipient, and some sites offer cryptocurrency gift cards that your recipient can then redeem. The new cryptocurrency owner will need a way to store the digital gift—the safest of which is keeping the asset offline, where it is less vulnerable to hacking and theft.

Non-Fungible Tokens (NFTs)

A non-fungible token (NFT) is essentially an online digital file that has been made available for exclusive ownership. Like cryptocurrency, NFTs are highly volatile and speculative investments, with a value based exclusively on what another buyer might be willing to pay. Then again, if you can tolerate their riskiness, NFTs could make an appealing gift because they are unique collectibles.

The general process for gifting an NFT involves buying the asset from an NFT marketplace and then transferring it to the recipient’s NFT wallet. The specifics may differ based on the specific NFT marketplace, which, in turn, vary based on their processes and the types of NFTs they offer. However, most marketplaces accept payments only via Ethereum, so you will likely need to have access to that blockchain platform to buy your NFT gift.

Donor Advised Fund (DAF)

Whereas giving financial assets as a direct gift can help set your recipient up for potential future financial success, a donor-advised fund (DAF) allows you to give the gift of giving. A DAF is a third-party entity that manages charitable donations on behalf of individuals, families, and other organizations. Contributing to a DAF offers significant tax advantages. In addition, giving a DAF as a gift could be a way to introduce somebody in your life to the importance of charitable giving.

To give a DAF as a gift, you would name your recipient as a donor advisor. Then, the gift recipient can work with the fund sponsor and recommend the organizations and causes that will eventually receive the charitable donations.

Life Insurance

It tends to be a difficult topic to discuss and may not occur to you as a gift idea, but life insurance can be a critical tool for maintaining financial security in a worst-case scenario. People generally buy their own life insurance policies, but it is possible to give life insurance as a gift. There are a few ways to go about this—you can designate the gift recipient as the owner or beneficiary of an existing life insurance policy, or you can establish a new policy for them.

You will need to demonstrate an insurable interest, and the person covered by the policy will likely need to appear for a medical exam and provide additional information. Either the gift giver or the recipient will need to continue paying the premiums so that the life insurance policy remains active.

IRA Contributions

Contributing to an individual retirement account (IRA) has become the cornerstone of many people’s retirement plan. Contributing to another person’s IRA as a gift could go a long way in helping them kickstart or catch up on their retirement savings. This is particularly true if you give the gift of an IRA contribution to younger people, as they will benefit from the longer time remaining until retirement and enjoy a more extended period of tax-advantaged investing.

However, there are certain restrictions to keep in mind if you’re planning to contribute to another person’s IRA. The same earned income requirements apply to the gift recipients as if they had made their own IRA contributions, and IRA gifts are subject to the standard annual contribution limits.

529 Plan Contribution

If your young gift recipient’s retirement is far in the future, contributing to a 529 plan may be a way to secure tax advantages while providing funding for a more immediate life stage—their education. If your recipient does not yet have a 529 plan account, you can open one on their behalf, or you can contribute your gift to an existing account. The recipient can withdraw from the account tax-free, provided they use the funds for qualified educational expenses. There is a special rule in the tax code that allows you to contribute a lump sum of up to five times the annual gift tax exclusion to a 529 plan and spread it over five years.

Credit Card Rewards Points or Miles

Are you looking for a present for an avid traveler? One digital asset that you could consider giving as a gift is your credit card rewards points or miles. With most types of credit cards, it’s not possible to transfer your rewards or miles directly to somebody else—instead, you can redeem the points for frequent flyer miles and then transfer those to your gift recipient. You may also be able to use your points to buy gift cards or other merchandise that you can give as a gift.

Should I Give a Digital Asset as a Gift?

Digital assets could make a good gift because, unlike most other items you can give, they have the potential to gain value over time. Gifted digital assets are one way you can contribute to the financial future of your recipient. In addition, because you buy and hold these assets in online accounts, the process of electronically transferring the gift to your recipient will likely be quick and easy.

How Do I Transfer a Gifted Digital Asset?

The exact process for transferring your gift will depend on the type of asset you’re giving. You will often be able to request that your brokerage account transfer a security you already own—or one you’ve bought specifically to give as a gift—to the account of your recipient. You can also use specialized online services that are designed to process the gifting of investment assets.

What Is the Best Digital Asset to Give to a Child?

If you are giving a financial asset as a gift to a child, there are a few additional things to consider. In many cases, digital assets gifted to recipients under the age of 18 will be held in a custodial account, which is an account that a parent, guardian, or another adult controls on behalf of the minor. There are plenty of benefits to getting children started with investing at a young age, giving assets lots of time to appreciate and encouraging healthy financial habits. One popular option for gifts to children is a contribution to their 529 plan account, a tax-advantaged method to help fund their education.

The Bottom Line

You have myriad options when shopping for a gift, but many of the presents you can give last only for a limited time. Digital assets are one type of gift with the potential to gain value and contribute to the recipient’s long-term financial well-being. The ability to buy and transfer investments quickly online also makes it easier than ever to give the gift of a digital asset.

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