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The IRS issued an info letter on the tax aspects of crowdfunding.
![go fund me campaigns go fund me campaigns](https://builtformars.com/uploads/images/gofundme-listing-image.jpg)
Fortunately, for income tax purposes, there has been some information from the IRS. When we think about somebody receiving money or somebody giving money to another person, both the income and transfer gift and estate and GST taxes come into play. We don’t want them getting sued by the beneficiaries because they’ve mishandled the money, and also the donors of the funds, making sure the money’s going where they want it to go and, so, lawyers are starting to think about and answer questions about how these various roles are being protected.ĭoes that charitable crowdfunding create any tax problems? So the concern is A) We want to see protections for both the beneficiaries of these campaigns, and also the organizers, if it’s different. The campaign manager or the campaign organizer sets this up it’s in their name, and the money comes in from various donors and GoFundMe collects the money – or whatever site you’re using – and then they hand the money over to the organizer to apply the money for the cause, and often these campaign organizers are not people who are necessarily sophisticated with dealing with large sums of money, and of course these campaigns are now raising huge amounts of money. There are quite a few open issues like: What happens if there’s money left over in the campaign? And these things are not really regulated at all. And clients who are either wanting to set up a crowdfunding campaign for someone, or wants to donate to one, are starting to ask about the consequences of that.
![go fund me campaigns go fund me campaigns](https://i.pinimg.com/236x/d3/1b/9f/d31b9f80a08c42ea828b2de9eedccce7--life-coaching-dream-big.jpg)
So it’s the humanitarian type of crowdfunding. So we’re starting to get questions from clients about charitable crowdfunding, and the kind of crowdfunding that we’re talking about here is the kind where you’re raising money for a charitable cause like a sick child or financial disasters in a family we’re not talking about the kind where people are raising money to start a business. Why are lawyers beginning to think about charitable crowdfunding? To learn more about this issue, you will be hearing today from ACTEC Fellows Professor Karen Boxx of Seattle, Washington and Karin Prangley of Chicago, Illinois. Individual fundraising has gone digital, and the funds raised are exponentially greater than in the past, however, the legal tax and fiduciary issues affecting the money raised remain murky and largely unregulated. This is Richard Gans, ACTEC Fellow from Sarasota, Florida. “The GoFundMe Revolution: What Happens Once the Money Has Been Raised?” That’s the subject of today’s ACTEC Trust and Estate Talk.