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Greven

Donationware?

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Greven    100
I have a question on registration/shareware/donationware. Is it legal to make something donationware? Where you simply state "It is not required, but a suggested donation of $X is suggested." The reason that I am wondering this is that I have heard that donations are not taxed. I know if I only get one or two people in a year to donate/register it wouldn''t be a big deal. But I''m thinking big What if''s and stuff. Let''s just say that 1000 people register my game this year, and the "suggested dontation" is $10. That would be $10,000 in a year! I wouldn''t even want to consider the tax problems I''d run into at the end of the year. But if I can say that it is a legitimate donation, and if they are not taxed, I''m good to go. Would I need to be a non-profit organization? Are there any lawyer programmers out there? Just seems like it would be to good to be true, and I want to know. Always remember, you''''re unique. Just like everyone else.

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Guest Anonymous Poster   
Guest Anonymous Poster
O_o Never even heard of donationware...I think that''s just freeware with a "donate to help us better this project and any projects in the future".

I don''t think you wouldn''t have to worry about tax on donations because they''re considered as a legal one-way transaction...It''s like someone giving you a monetary gift for your birthday...every day of the year...O_o

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Obscure    175
It almost certainly is too good to be true. Income is income and just because you call it something else that isn''t going to stop the tax man. Obviously laws vary depending on what country you are in but generally the tax man has the power to say "I don''t care what you are calling it, this money is income and we are going to tax you on it".

Even if people sent you birthday cards with every cheque it wouldn''t stop the tax man. If they found out that these people received something in return for the money then they would be after you for tax.

Charrity and not-for-profit organisations can not be used as a scam to avoid paying tax (well actually they can but getting caught will land you in real trouble). The law surrounding the setup, running and accounts proceedures for both are very strict and if the tax man thinks it is just there to shield your income you will end up in court on more than just tax evasion charges.

Dan Marchant
Obscure Productions

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avianRR    100
Obscure is correct. the only way you could collect non-taxable donations is if you were a not-for-profit organization like the Salvation army or Red Cross. Or a churches and other religious organaztion. And I doubt you could get away with creating the "Feed My Face fund" or "The Temple of Me" and get away with it.

-----------------------------------
"An it harm none, do as ye will"

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Diodor    517
quote:

If they found out that these people received something in return for the money then they would be after you for tax.



Technically, there was no exchange. They can have the product for free. They can send money whether they use the product or not. I have no idea about the legal issues tho.

But I doubt you''ll get enough income this way to worry about taxes. From what I''ve heard, the number of people that will donate is much lower (zero?) than the number of people who would have bought a shareware game (which goes around 1% of the number of downloads).

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You must also be a _registered_ organziation to receive tax-free donations. What you''re proposing would spell trouble.

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