There are five factors that affect the taxation of crowdfunded transactions:
- location (and possibly citizenship) of the parties
- organizational form of the issuer and the investor
- use of the funds
- timing of the transactions
- type of offering (debt, equity, purchase or gift)
None of the underlying tax issues are complicated but the number of possible combinations of these five factors is staggering. In some rare cases, the tax compliance filings can be daunting. The best advise is to talk it over with your own adviser before entering into a transaction.