Are donations for "free" software taxable?

March 8, 2004

Subject:  Tax implications for amounts paid to open source developers

From:  Mital
Date:  Fri, 27 Feb 2004

Hi,

These days open source is getting popular and more hard core developers have started writing free software to make the world a better place. Some people are making donations to these developers that are basically micro payments made sometimes either through check or online via credit card.

My question is: Are these amounts that the developer received taxable? Also, would the answer change if the developer was not doing this for his living but just something on the side in his spare time? Please advise.

Thanks for your help.

Answer

Date:  Mon, 01 Mar 2004

Hello Mital,

Yes, the "donations" are taxable, even when received for part-time activity.

Good luck!
Mike Gray

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