Question for gaming community owners...

[IcEWoLF]

Do you guys report taxes for donations received towards keeping up your game servers?

All of the donations come to my paypal account, none of the funds come to me, they all go out towards server expenses every month.
I don't have any gains from it, instead sometimes when we are short money gets transferred from my account directly to paypal to cover the costs.

I know you guys are not tax experts and I won't take any legal advice, but I'd like to know what you guys do regards to this matter.

I guess I could always start using the NFo Coffer system.

[kraze]

When I ran my community I didn't but then again I wasn't taking in $300 a month in donations..

Not sure if this is your case, however in my opinion unless you are bringing in a lot of money I wouldn't worry about it to much.

[IcEWoLF]

When I ran my community I didn't but then again I wasn't taking in $300 a month in donations..

Not sure if this is your case, however in my opinion unless you are bringing in a lot of money I wouldn't worry about it to much.

True, I am not bringing any money, all the money if IRS audits me will show the cost is going to NFo and another web hosting company.

I'll probably end up incorporating my system to the NFo coffer system, I think that would save me tons of headaches.

[badbadrobot]

I had the same question. We get 600-700 in donations. What we don't spend in server bills, we user for website upgrades and give back to the community in give aways and contests.

[Edge100x]

I don't know this one, myself. It might be a good idea to check with an accountant.

We have to report and pay taxes on all the donations that go to us, but that's more clear.

[IcEWoLF]

I don't know this one, myself. It might be a good idea to check with an accountant.

We have to report and pay taxes on all the donations that go to us, but that's more clear.

Yeah, looks like I have to go that route.
I'll probably need to LLC my community.

[woowoo]

I'm not an expert but the way I view this is it is similar to you incurring an expense for a charity (e.g. church, school, etc.), and then you submitting an expense for it. The charity would reimburse you for the expense and would not count as income. The gray area comes from the unofficial nature of most clans - they aren't registered as charities or non-profits. The more of a club. I bet some where in the tax code this is covered.

But unless you are deriving income or some personal benefit from the arrangement the IRS would have a hard time seeing this as income. You're just the treasurer.