Good afternoon toniisgolden,
Its great that you want to help small business by being an angel investor.
This is an investment; not a charitable contribution.
Tax treatment of the income or loss that is passed to you will depend on how the business you invest in is structured. Implications of your investment will also vary based on your current tax situation.
You should ask questions that will make you feel secure about your investment. Questions may include asking about the background of the founders, the challenges they foresee, and why they need the funding.
This is a QuickBooks blog article about Angel Investors from the start up's side that may provide some helpful insight.
Thank you for reaching out to the TurboTax Community.
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