Question about website revenues

[Codedonkey]

I figure there as to be someone who knows the answer to this question here... Can't find the answer anywhere else.

If I had a website that collected roughly $1000/mo in donations from its users, would that money have to be reported and would it be taxed? Would it still be considered a donation if the users who donated get some sort of special donation benefits like no ads? Also, would donated money have to be used solely for the purpose of the site, or could I buy myself a pet monkey with some of cash?

I'm very unclear on how that aspect works and would appreciate it if someone could clear it up, or perhaps even point me in the right direction toward some accurate information... Accurate being the keyword.

[LeftyFingerPop]

1. Here's a place to start...

http://www.irs.gov/businesses/small/article/0,,id=141491,00.html

In general, if you are receiving money, the IRS wants a cut.

Is this a business? What is prompting users to shell out the substantial sum of $1,000 per month? What are they getting in return?

Start at the above link, and then call a tax accountant with the details.

Good luck.

[Codedonkey]

2. wishful thinking teehee teehee,,,

Yeah, I'm thinking I will talk to a tax account to figure it all out... Anyways, the idea is a number of users will shell out a small amount of cash in exchange for a few extra perks... I'm not really interested in making money, but simply not losing money via hosting... if it doesn't catch on then I'm not out anything so it doesn't matter...