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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15738
Experience:  15years with H & R Block. Divisional leader, Instructor
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I want to start a KickStarter campaign to raise money

Customer Question

I want to start a KickStarter campaign to raise money for a live theatre production and from profits donate 30-40% to specific charities. The issue I have is if I do not reach my goal on Kickstarter, than I am out money spending on creating a company with no project money. Any recommendations on a step by step process to get started or where to start?
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.
HelloStart-up costs are amounts paid or incurred for: (a) creating an active trade or business; or (b) investigating the creation or acquisition of an active trade or business. Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit; and for the production of income in anticipation of the activity becoming an active trade or business.A start-up cost is amortizable if it meets both of the following tests.It is a cost you could deduct if you paid or incurred it to operate an existing active trade or business (in the same field as the one you entered into).It is a cost you pay or incur before the day your active trade or business begins.You will be able to deduct the costs when you file. This is true even if the kick starter does not meet the goal.
Customer: replied 1 year ago.
Understood. Relating to Kick Starter, can I wait to create a non profit etc. until after the campaign is over to start a company? Since there are no guarantees in raising the money, I wanted to be sure that it was raised first before spending any more finances.
Expert:  Robin D. replied 1 year ago.
If you start a non profit after then you would not be able to deduct your contribution to the non profit.If you wish to have a non profit in this you should start that process prior to requesting funds.