Do I have to pay tax on money received from investors to start my for-profit internet business?
Posted by admin | 31/08/10 | Tagged United States
I am about to receive $100,000 from investors to start my for-profit internet business.
Each investor will become a shareholder of the company (receiving a 1% for every $10,000 invested).
The money invested ($100,000) will be used to get the company up and running.
Do I/we have to pay taxes on the $100,000 invested?
No, it is contributed capital, not revenue. I hope this is a homework question and not a legit one. That is very basic business concept and if you do not know that, then your “investors” are doomed.