Crowd-funding & Sch C

[Catherine]

Client has a small business (Sch C).  I see on his spreadsheet for 2013 a one-time, large (over $150K) receipt categorized as "Income" from Kickstarter.

 

How does this get treated?  It is not sales.  Just "other income" -- or is there some other treatment I need to know about?  

I've never before seen crowdfunding sourced income and don't want to muck it up for lack of info.

 

TIA,

Catherine

[ILLMAS]

https://www.kickstarter.com/help/taxes

[Catherine]

Never would have thought Kickstarter had a tax help page.  Thanks.

[Lion EA]

I had one client on Kickstarter during 2014, but her project did not get funded.  If your client kept a spreadsheet, he probably has all his expenses listed.  Most of these Kickstarter projects offer things in return for various funding levels, books, tee-shirts, an iPhone app, original artwork, etc., so the purchase or creation of those things, if outside their normal manufacturing or business expenses,  also create expenses.  For example, my client was going to ship tee-shirts, stylus (what's the plural?), etc., in January 2015; so we'd discussed paying for them during 2014 to match the year she would receive the income.  In her case, she has huge expenses for developing an iPhone app, so the $5,000 she was seeking would still leave her in the red this year.

[Catherine]

stylus --> styli

standard Latin plural

 

I do have the promo item expenses list.  They really kept excellent track of everything - but I still had a three-page document of questions.

 

Thanks!

[Lion EA]

Some days I wish I'd taken Latin like my mother told me to do!  I took Russian during the cold war, because a science major really needed Russian or maybe German.  Like that did me any good.

[Catherine]

My "Latin" came from growing up speaking Italian, a stint in college doing medical transcription, and puzzling my way through Latin paragraphs a couple of times a year for several decades.  But I do know the rules for masculine and feminine plurals!

 

Also studied Russian in college; our textbook had a terrific story about Superman, all drawn in really poor stick figures by the author, that was just hysterically funny.  I can still read and enjoy it, and recite the opening lines.  Superman fighting for "Americanskii obraz zhizni" still makes me chuckle (the American way of life -- in Russian).