Yes, you can contribute cryptocurrency into the Craft Pod on a tax-deferred basis under Section 721 of the U.S. tax code. Section 721 allows you to contribute property to a partnership in exchange for partnership units without triggering immediate capital gains tax . The IRS treats crypto as property, so appreciated crypto assets (like Bitcoin, Ethereum, etc.) are eligible for this treatment just like stocks or real estate.
How it works: Instead of selling your crypto for cash (and possibly incurring a taxable gain) to invest in the Pod, you contribute the crypto itself directly into the Pod. In return, you receive an ownership interest in the Craft Pod (our partnership fund). Because of § 721, any built-in gain on your crypto is not recognized at the time of contribution – meaning you won’t owe capital gains tax just for moving the crypto into the Pod. This is similar to how our program accepts concentrated stock positions for tax-deferred contributions.
A few important notes: After contribution, the crypto becomes part of the Pod’s diversified portfolio. Craft may choose to hold it or convert it into other assets as part of managing the fund. The tax deferral continues as long as your investment remains in the Pod. You would only face a taxable event when you eventually exit or the Pod distributes assets to you down the line (and even then, there are strategies to continue deferring – see Early vs. full-term exit tax considerations). We recommend discussing with a tax advisor before contributing crypto, but rest assured that our exchange fund structure is specifically designed to allow tax-efficient contributions of appreciated assets (both crypto and stock).