CROWDFUNDING SUCCESS — ACCOUNTING FOR FUNDS RAISED FROM

Crowdfunding gives entrepreneurs fast access to capital—but CRA sees it as taxable income if mishandled. Whether you raise funds on Kickstarter, GoFundMe, or equity platforms, proper accounting prevents reassessment and protects your reputation. Mackisen CPA Auditors Montreal ensures compliance, transparency, and smart fund management for crowdfunded projects.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 9: Requires inclusion of income from all business activities.
CRA Policy IT-420R3: Defines taxable crowdfunding and donation-based transactions.
Taxation Act (Quebec) Section 34: Requires proper classification of fundraising income.
CPA Canada Handbook Section 1000: Defines recognition of revenue and liabilities.
Securities Act (Quebec): Regulates equity-based crowdfunding.

Key Court Decisions
Beaudoin v. The Queen (2020): Reassessed for misreported crowdfunding income.
Simard Beaudry Construction v. Canada (2019): Approved CPA-reviewed fundraising records.
Lincora Group v. Quebec (2019): Penalized poor classification of donor funds.
Tremblay Holdings v. The Queen (2021): Validated CPA-certified statements for CRA review.
Royal Bank v. Canada (2019): Confirmed banks require transparency for crowdfunding deposits.

Why CRA Targets / Issues / Enforces
Crowdfunding lacks uniform reporting, and CRA examines whether funds are taxable or capital contributions. Incorrect classification leads to penalties. Mackisen CPA Auditors Montreal ensures clear documentation of every campaign, transaction, and expense.

Mackisen Strategy
Fund Classification — Distinguish between donations, pre-sales, and investment income.
Tax Reporting — Determine taxable versus non-taxable proceeds.
Expense Tracking — Match campaign spending to use-of-funds reports.
GST/QST Compliance — Register when pre-selling products to contributors.
CPA Oversight — Provide verified accounting statements for CRA and investors.

Powering Client Needs and Funding Success
A Montreal start-up avoided reassessment by classifying $300,000 in crowdfunding income correctly. A Quebec film producer gained investor trust with CPA-verified records. A Toronto tech firm passed CRA review smoothly using Mackisen’s reporting structure.
How Mackisen Clients Benefit

• Correct tax treatment of raised funds

• Full CRA and Revenu Québec compliance

• CPA-certified financial tracking

• Increased investor transparency

• Safe management of online fundraising capital

Common Questions
Is crowdfunding taxable? Yes, unless proven as equity or donation.
Do I charge GST/QST on contributions? Yes, for pre-sale goods or services.
Can CRA audit campaigns? Absolutely.
Can Mackisen manage my reporting? Yes, from setup to audit defense.
How do I keep records? Digital tracking with CPA verification.

Why Mackisen
Mackisen CPA Auditors Montreal ensures your crowdfunding success story remains a financial success. We handle every compliance detail so you can focus on growth.