I’ve shared a lot of information this week about crowdfunding and taxation, for both recipients and givers. If you are looking to for a way to honor Juneteenth, you can support POC-owned businesses in Minneapolis by contributing to the Du Nord Recovery Fund.
Du Nord Craft Spirits is a Black-owned Minneapolis business that is using its popularity to raise funds to rebuild smaller POC-owned businesses that were affected by the uprising for human rights in the wake of the police murder of George Floyd on Memorial Day.
As covid-19 has shuttered or slowed businesses and the uprising for human rights in the wake of George Floyd’s murder has prompted an outpouring of mutual aid in cities across the US, many people are using crowdfunding who have never used it before.
Just as recipients often wonder if the support they receive is taxable (see Part 1 of this series), givers sometimes wonder about the tax implications of their contributions. The short answer is: there usually aren’t any—so don’t be afraid to give!
Before we go any further, please consider supporting the Du Nord Recovery Fund, which will ensure that POC-owned businesses on Lake Street in Minneapolis will be rebuilt.
In the rare event that giving affects your taxation, what that effect is really depends on what kind of transaction you’re participating in.
The five types of crowdfunding transactions are donations, gifts, purchases, loans, and equity. Gifts are the most common transaction in an emergency.
As covid-19 has shuttered or slowed businesses and the uprising for human rights in the wake of George Floyd’s murder has prompted an outpouring of mutual aid in cities across the US, many people are using crowdfunding who have never used it before.
Recipients often wonder if the support they receive is taxable. The answer depends on what kind of transaction you’re participating in.
The five types of crowdfunding transactions are donations, gifts, purchases, loans, and equity. Gifts are the most common transaction in an emergency.
Before we go any further, please consider supporting the Du Nord Recovery Fund, which will ensure that POC-owned businesses on Lake Street in Minneapolis will be rebuilt.
Now, on to the tax implications of crowdfunding. The main question you should ask yourself is: Am I offering anything in return for the contributions I receive?