Do donations make a website a business?
By android
@android (894)
March 16, 2009 9:13pm CST
If a website builds up a community of users and begins to accept donations, then 100% of the donations are used to operate and pay the site's costs and anything left over is distributed to the website's users, does that make the website a business? And does tax have to be paid on the donations received?
1 person likes this
1 response
@thinkingoutloud (6127)
• Canada
17 Mar 09
I am not a professional so I can only give you an opinion... I'd suggest you do some research with your local tax authority to be sure. In any case, if the website is not an officially registered, tax-exempt charity (i.e., accepting charitable donations which would be tax deductible), it sounds like the distributed monies would be subject to tax (as personal income, at personal taxation rate).
@thinkingoutloud (6127)
• Canada
17 Mar 09
Yes, that's what I'm thinking... it sounds like each person that receives money would be taxed on it at their own personal taxation rate. There are a lot of other factors that would/could come into play, as well, such as how much money they would actually be receiving.
