Crowdfunding leads to tax-time confusion

Crowdfunding raises money for many different purposes—personal, business, and charitable.  The purpose determines how these are treated for tax purposes.   Sometimes these contributions are a gift; sometimes they’re an investment that will offset future income; sometimes they are a deductible charitable contribution.  If you’re receiving the benefit of crowdfunding contributions, you may have taxable income or you may have a tax-free gift, even if you receive a 1099-K.  Ask your tax preparer to help you with this.  (March, 2017)