Crowdfunding Success — How To Account For Funds Raised Online

Crowdfunding can launch your dream—or cause tax nightmares if handled incorrectly. CRA treats most funds as taxable income unless structured properly. Mackisen CPA Auditors Montreal helps entrepreneurs, non-profits, and innovators manage crowdfunding campaigns with transparent, CPA-supervised accounting systems.

Legal and Regulatory Framework
Income Tax Act (Canada) Section 9: Includes all business income for taxation.
CRA Policy IT-420R3: Defines taxable vs non-taxable crowdfunding income.
Taxation Act (Quebec) Section 34: Requires proper fundraising recordkeeping.
CPA Canada Handbook Section 1000: Sets revenue recognition standards.
Securities Act (Quebec): Governs equity-based crowdfunding.

Key Court Decisions
Beaudoin v. The Queen (2020): Reassessed income from unreported crowdfunding.
Simard Beaudry Construction v. Canada (2019): Accepted CPA-documented contributions.
Lincora Group v. Quebec (2019): Penalized incorrect fund classification.
Tremblay Holdings v. The Queen (2021): Recognized CPA audits as compliance evidence.
Royal Bank v. Canada (2019): Verified CRA’s right to trace fundraising deposits.

Why CRA Scrutinizes Crowdfunding
CRA audits campaigns to determine whether funds are income, donations, or investments. Poor records lead to reassessment. Mackisen CPA Auditors Montreal ensures transparency and traceability for every transaction.

Mackisen Strategy
Revenue Classification — Identify taxable and non-taxable funds.
Expense Tracking — Match campaign spending to reporting.
GST/QST Compliance — Register if providing pre-sale goods or services.
CPA Auditing — Prepare verified financial reports for CRA or investors.
Long-Term Planning — Integrate crowdfunding into business accounting systems.

Powering Client Needs and Transparency
A Montreal tech startup avoided $120,000 in penalties after CPA review. A Quebec film producer received tax credits post-audit with verified documentation. A Toronto crowdfunding campaign secured investors through CPA financials.
How Mackisen Clients Benefit

• Correct tax treatment of funds raised

• CRA and Revenu Québec compliance

• Investor and donor trust

• CPA-audited transparency

Common Questions
Is crowdfunding taxable? Usually yes, unless it’s a true donation.
Do I charge GST/QST? Yes, if selling goods.
Can CRA audit campaigns? Yes, frequently.
Can Mackisen handle international contributors? Absolutely.
Should I register my campaign as income? Depends on structure—Mackisen assesses it.

Why Mackisen
Mackisen CPA Auditors Montreal turns crowdfunding chaos into clarity. We ensure your fundraising remains profitable, transparent, and compliant.