Reporting of sales from crowdfunding activity. Borrowing activity of bank account to a client, and 1099-K.
How to report 1099K and sales? We let our client borrow our business account to host a crowd funding project via Kickstarter. The client is a foreign corporation who did not have an EIN and US bank account, therefore they used our business to register their project in Kickstarter. The funding project was extremely succesful and total funding amount exceeded half million. We received 1099 K for the transactions which are not actually our own revenue. Do we have to report the receipt of fund as sales or liability? Some people say annual revenue should match with Form 1099K to avoid a tax audit, but others have different opinions. Any inputs?