New York, New York (PRWEB) October 31, 2013
Business Review today releases its top chosen Toronto accounting firm’s advisement to Canadian tax payers that the CRA’s stance on crowd funding will apply to a specific scenario where a person who donates money to a commercial venture, like producing a musical recording, may receive a free product or promotional item, but would not receive any equity or be entitled to a share of the profits from the venture. Certain expenses, like the cost of producing promotional items given to donors and the cost of financing activities, may be deductible if the requirements for deductibility in the Income Tax Act are also met.
Non-business purpose tax treatments of crowdfunding proceeds like donations to humanitarian aid are not addressed by the CRA; taxpayers receiving crowd sourced funds should not be subject to tax where no business is carried on. “The practice of funding a venture by raising small amounts of money from a large number of people, typically via the Internet,” says Mark Feldstein of Mark Feldstein and Associates. “The CRA's position will raise the after-tax cost of crowdfunding, which may have a significant impact on independent artists and start-ups that cannot access capital from more traditional sources.”
Crowdfunding in Ontario is generally prohibited, yet the Ontario Securities commission has issued an exceptive relief order to permit Social Venture Connection. More information on crowdfunding is available on the CRA’s website.
Mark Feldstein & Associates, Chartered Accountants, provide a wide range of professional services to businesses and individuals. To ensure clients receive the best advice in each area, Mark Feldstein & Associates hire only seasoned specialists who, in turn, devote a good portion of their time to upgrading their skills through in-depth professional development. Mark Feldstein has been practicing public accounting and specializing in voluntary disclosure since 1982. He has experience in a wide variety of industries, including retail, manufacturing, importing and exporting, wholesale distribution, technology, restaurants, law firms, engineering firms, architecture firms, education, IT consultants, voluntary disclosure, wealth preservation planning, forensic investigations, internet service providers and construction.
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