While getting queasy in researching your question, I came across the case of Margaret Green, a 1980 Tax Court decision (74 T.C. 1229). As a rare blood type, Green donated 95 times in 1976, earning approximately $7,000. The court found it clear that the income earned was taxable without regard to the frequency of her donations. Further, the court found that due to her frequency of donations, she should be considered self-employed in the business of selling tangible property -- namely blood.
Hence, the inference from the tax case is that although blood is not your normal business goods, you can still make a business out of it for tax purposes. Depending on the frequency of your donations, money received from blood banks can be considered earned income.
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