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Questions Answered by Alexander Kugelman
1 Answer | Asked in Tax Law for California on
Q: What legal consequences will I be facing, come tax season, for using crowdfunded money to pay a friend for work?

I don’t have a business and will be using money gained from crowdfunding, to pay a friend to help me develop an animated feature. Will there be any differences if I were to make this animated feature available to the public free of charge or selling the feature when it is done? What legal... Read more »

Alexander Kugelman
Alexander Kugelman answered on Jan 12, 2021

Very likely the money received via crowdfunding will be taxable income to you. If you don't have an entity, then you would report it as a sole proprietorship income on a Schedule C. Keep in mind that you can claim ordinary and necessary business expenses to offset the income. For example,... Read more »

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