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28 CAVALIER CORNER Name, Image and Likeness (NIL) Eric Baumgartner, Associate Athletics Director for Compliance compliance corner Support The VAF With A Gift Of Cryptocurrency Gifts of cryptocurrency (also known as virtual currency) can have tax advantages and provide meaningful support for the Virginia Athletics Foundation. GIFT OPTIONS • The UVA Foundation, for the benefit of the Virginia Athletics Foundation, can accept gifts of cryptocurrency valued at a minimum of $5,000. • Gifts of cryptocurrency must be made outright for im - mediate use. These gifts cannot be used to fund a chari- table gift annuity or a UVA-trusteed charitable remain- der trust or charitable lead trust. BENEFITS The IRS issued a 2014 notice explaining that it will treat cryptocurrency as a capital asset (rather than currency) for tax purposes. Your tax benefits will be determined accord- ingly. This means the following: • If you have held the cryptocurrency for more than a year, you may avoid capital gains tax. If you have ac- quired such units over time, you may consider iden- tifying and donating the specific units with the most appreciation (the lowest cost basis). • You can claim an income tax charitable deduction for your gift, at either cost basis or fair market value (de - pending on how you acquired the cryptocurrency and how long you've held it), which can reduce taxes owed if you itemize deductions. • Note that you will need to substantiate your claimed deduction. You must obtain a qualified appraisal to substantiate a claimed deduction in excess of $5,000. For a claimed deduction of $5,000 or less, you will need to substantiate your claimed deduction as otherwise required by federal tax law—for cryptocurrencies traded on a public exchange, the fair market value may equal the spot price at the time of the donation. Note that you will need to complete Schedule B of Form 8283 and file it with your federal return. The UVA Foundation will file a Form 8282 to report the sale of the cryptocurrency. Please check with your advisors to confirm what you need to support your claimed deduction. HOW TO MAKE A GIFT OF CRYPTOCURRENCY • Contact your VAF development officer. They will work with you to notify the UVA Foundation of your intended gift and to provide important information about the cryptocurrency and how you want your gift used to sup - port Virginia Athletics. • The UVA Foundation has a Coinbase wallet. Once the proposed gift is approved, we will provide you with the UVA Foundation's Coinbase wallet address. Please note that the approval process will take a little bit of time to ensure we can accept and process your generous gift. • The UVA Foundation will liquidate the cryptocurrency when received and send the net proceeds to the VAF. • You will receive VAF gift credit in the amount of the net proceeds received. As of July 1, 2021, student-athletes are permitted to engage in activities that use their NIL. These activities include, but are not limited to, appearances, autograph sessions, endorsement and sponsorship agreements, social media influencer activities, camps, clinics, and promotional activities. To assist student-athletes with this new landscape, the athletic department has partnered with internal and external partners. Externally, the athletic department has partnered with INFLCR to provide educational resources about finance, brand - ing, entrepreneurship, networking and much more. Internally, the athletic depart- ment is working with Darden, McIntire and the Law School to create educational resources and establish mentorship opportunities. Additionally, the athletic de- partment has continued to expand Pathways — the athletic department's student development and leadership program — to include NIL resources. Virginia Athletics Foundation (VAF) donors may be interested in engaging with student-athletes. Neither NCAA rules nor athletic department policies prohibit such activity. However, the student-athlete must be paid for work actually per- formed, the NIL agreement cannot be an inducement to enroll or remain at UVA, nor can it be "pay for play". Listed below are some "Do's and Don'ts" for VAF donors about NIL opportunities with student-athletes: DO'S: • It is permissible to reach out to student-athletes about participating in legiti - mate NIL opportunities. • It is permissible to respond, if so inclined, to student-athletes seeking opportu- nities to benefit from their NIL. • Please provide any/all information about NIL agreements with student-athletes to the UVA compliance office. Student-athletes are required to disclose any NIL agreement and information about involved parties, compensation and scope of the agreement will be needed. • Please contact the UVA compliance office at athleticscompliance@virginia.edu or nil@virginia.edu if you have any NIL questions. DO NOT'S: • UVA and VAF staff cannot be involved in facilitating, advising, promoting, or counseling student-athletes regarding NIL activities. Donors and student-ath - letes would need to independently establish a business relationship. • Student-athletes must be paid for work performed pursuant to the agreed upon terms to receive compensation. For example, a student-athlete who agreed to make an appearance at a corporate luncheon could not be compensated unless he/she made the appearance. • Please do not provide any form of compensation to a student-athlete for ath - letic performance, ability or solely based on his/her status as a student-athlete. This type of payment would be considered "pay for play" and is not permissible. • Please do not request a student-athlete to engage in an NIL activity while they are participating in an official team activity (e.g., meet the team event, com- munity service, during an away-from-home contest, etc.). • Please do not engage in an NIL arrangement that is an inducement to attend UVA. Please do not provide pro bono or reduced rate services to student-athletes. Student-athletes are permitted to use agents, attorneys and other professional service providers for NIL activities but cannot receive a special fee arrangement as a result of being a student-athlete. All NCAA rules regarding preferential treatment, extra benefits and recruiting contacts and inducements remain. As more information becomes available, the UVA compliance office will update VAF donors. To find out more about making a gift of cryptocurrency, contact a member of the VAF team at 434-982-5555. & VAF news notables