The CRA will tax money raised through crowdfunding
Crowdfunding has become a legitimate avenue for entrepreneurs and artists to raise money for their unique ideas or projects, but anyone crowdfunding needs to know that the CRA can tax you on the money raised.
If a person received money for their business or project, such as a movie, and they receive the completed product or a promotional item, but not equity or a cut of the profits, then that's considered to be business income. But whether those crowdfunding expenses are deductible or not depends on whether they follow the Income Tax Act.
There continues to be debate in Canada about the pros and cons of crowdfunding, but the latest statistics by research firm Massolution show that $2.7 billion was raised worldwide for more than one million campaigns in 2012.