The Kickstarter Effect-Frontloading the Developement?

[Monte Carlo]

Ah, accountancy. Always good for a rip-roaring forum experience.

[Streamlock]

Well, looks to be ways to work it so Kickstarter funding/investment does not get evaporated prior to the products release if nothing else. Good to know, also it appears that some networking of Kickstarter devs is going on behind the scenes, so hopefully the lessons learned from one group is being shared with other developers/what have you.

 

If what some have said is truly the case, and if you can not significantly reduce the tax liability for project investment funds, and it just gets defered until the delivery of goods.....The downside is a major tax bill on the back end, that has it's own headaches.

 

Regardless, an ealier post stated that Obsidian knows, or hired someone to navigate the overly obtuse tax code, and that the KS funding will be utilized more toward it's maximum potential and not "lost in (tax) spaaaaaaaace". More to the point, they should not have to spend massively at the beginning of the project-for better or worse.

[Streamlock]

Ah, accountancy. Always good for a rip-roaring forum experience.

 

Yeah, I guess if I could have found a way to work in accountant side boob, the realism of accountants in full a plat thong, or how the tax code of old was supperior to the newb 1040 EZ forms AND figure out a way to work in an argument about inclusion of romances in Obsidians next 1099 filling.........

 

Well-it would have probably garnered more views if nothing else.

[Darkpriest]

 

@Darkpriest

 

I'd also point out restricting cash would still make it taxable income unless my aforementioned revenue recognition rules applied. If you were to ask an actual accountant, you would get multiple answers most of which lead to treating it as an investment, a liability, or purely income. The last of which is the most conservative/safest of options.

 

That's why I was pointing out, that you should be able to prove that you have an obligation arising from the said cash collection - I'm just not 100% sure that the deferred revenue would be the best place to put the liability into. If it works, then all the better as it's simpler to document and maintain.

 

BTW, the most conservative/safest of options is to pay taxes on anything you do, but that's not the best way of running a profitable business

[Darkpriest]

Ah, accountancy. Always good for a rip-roaring forum experience.

 

Would you rather have another chainmail bikini or romance thread? This might be somewhat productive in a tangible manner (as in, saving some cash in the end result) if people with the actual experience in this field can benefit for no cost at all

[Aeristal]

Well, looks to be ways to work it so Kickstarter funding/investment does not get evaporated prior to the products release if nothing else. Good to know, also it appears that some networking of Kickstarter devs is going on behind the scenes, so hopefully the lessons learned from one group is being shared with other developers/what have you.

 

If what some have said is truly the case, and if you can not significantly reduce the tax liability for project investment funds, and it just gets defered until the delivery of goods.....The downside is a major tax bill on the back end, that has it's own headaches.

 

Regardless, an ealier post stated that Obsidian knows, or hired someone to navigate the overly obtuse tax code, and that the KS funding will be utilized more toward it's maximum potential and not "lost in (tax) spaaaaaaaace". More to the point, they should not have to spend massively at the beginning of the project-for better or worse.

 

The ideal way to deal with the situation is to recognize some revenue and some expenses throughout the entire life of the project. Therefore, minimizing profit at all ends of the spectrum and preventing increased tax rates.

 

The reason the Tax code has grown more complex is because that easy tax code we used to have was riddled with easy to spot loopholes that allow people to avoid taxation. Now, its riddled with loopholes that are mediocrity more difficult to spot let alone navigate with red flagging the IRS.