I'm not in the USA but have a deep curiosity due to the borderless internet.
You see, I know and individual who makes money by receiving donations via a web site.
People who donate have claimed that they're allowed to gift up to $12k tax free etc which I have read about.
So my questions are ...
1/ Is it a $12k tax free gift to the recipient per giver or total? In other words if 10 people gifted $12k, total being $120K is that tax free to our website owner?
2/ How is determination made between gift and income? For example, if I ran a website and encouraged donations and earned say $10k a year from this adventure would it be taxable or not?
3/ To step it up some think of this. I actually am a contractor and instead of getting paid for doing service jobs where all earnings are for labor I actually get my clients to donate to me at my website ... is it tax free and a gift or income?
I write this in honesty and good faith trying to understand how the system works. I do know of an individual drawing size-able funds from a website forum which is geared at obtaining "donations" and auction proceeds from member auctions at the site. I just have trouble believing this is tax free but it has been said it is as monies are gifts not income???????????????
Thank you.
Ekka
PS: Where I'm from it's 100% taxable income unless the recipient is a registered charity.
You see, I know and individual who makes money by receiving donations via a web site.
People who donate have claimed that they're allowed to gift up to $12k tax free etc which I have read about.
So my questions are ...
1/ Is it a $12k tax free gift to the recipient per giver or total? In other words if 10 people gifted $12k, total being $120K is that tax free to our website owner?
2/ How is determination made between gift and income? For example, if I ran a website and encouraged donations and earned say $10k a year from this adventure would it be taxable or not?
3/ To step it up some think of this. I actually am a contractor and instead of getting paid for doing service jobs where all earnings are for labor I actually get my clients to donate to me at my website ... is it tax free and a gift or income?
I write this in honesty and good faith trying to understand how the system works. I do know of an individual drawing size-able funds from a website forum which is geared at obtaining "donations" and auction proceeds from member auctions at the site. I just have trouble believing this is tax free but it has been said it is as monies are gifts not income???????????????
Thank you.
Ekka
PS: Where I'm from it's 100% taxable income unless the recipient is a registered charity.