Crowdfunding Tax Matters*

Not fair?

Wisebread notes that crowdfunding campaigns for charitable causes could result in the web portal filing an IRS Form 1099 that would indicate that you received income during the year. The site suggests that if you do that “make sure it’s in their name so you don’t end up wondering if you need to pay taxes on money you handed over to them.”

In addition, any crowdfunding monies received a rewards-based crowdfunding campaign will probably be deemed to be revenues subject to tax; monies received in an equity crowdfunding could be considered capital for which capital gain may apply to the investor; and debt crowdfunders could be taxed on the interest they receive.

Talk to your accountant or tax attorney before you start.

*(None of the above should be considered legal advice).

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at:
This entry was posted in accredited investor, checkbook, Congress, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Department of the Treasury, Funding Portals, Investments, Jobs, Legislative Intent, SEC, Uncategorized, VC, Venture Capital, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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