Tax Consequences of Crowd Funding

Paul Battista, an attorney in Los Angeles who represents low budget independent filmmakers, recently wrote a blog post for FilmCourage about the tax consequences of a successful crowd funding campaign.

You'll need to engage a tax professional. And the answers that professional will give may depend on whether you've received the funds as 1) an investment; 2) income; 3) funds provided to a tax-exempt organization; or 4) a gift (and your tax pro won't be interested in your definition of these terms, but how these terms are defined under the Internal Revenue Code).

Paul Battista says: "At the very least, your tax professional will need to know the following: the relationships between the filmmaker and each party providing funds; the amount each party provides; what the party receives in return from the filmmaker (and its fair market value); whether the filmmaker receives the funds directly or an entity receives the funds; the owners of an entity that receives funds; whether the filmmaker has a “tax-exempt” organization that receives the funds; and the filmmaker’s efforts to engage in producing the film “for profit.""

No comments:

Randy Finch's Film Blog:

Thoughts from a film producer about making and distributing films.