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Originally Posted by Feniks

Hi, I received from Sedo 1099-misc in which Sedo listed in box 9 'payer made sales $5000 or more of consumer goods etc..' . Domains are not consumer goods , right ? I went directly to irs office and they never heard about selling domains or what is and which forms to use to file income taxes . One irs agent told me..box 9 is schedule c... but this is for business and in irs booklet is qoute like ..dont use schedule c if you selling ocassionallllly/ or sporadic... Second irs agent over phone have not idea also . Turbotax people , spoke to few 'tax pro ' and got different answers and forms , hrblock people, have no clue . Can anyone who already filed taxes , tell us how they reported sales of domains and which form, schedule d or schedule c or else ? It is shame for irs.gov where is listed many type of incomes to report such as//illegal sales of drugs, bribery, if you stole , etc but no word about domains . It is 21 st century and we have catch 22 here . Also , big firm like Sedo should explain people where and how to report income from sales . I think is capital gains , as many of us, but it is important what irs examiner think . One examiner can say 'ok' second one 'wait a minute ..' If someone filed in 2006 , please tell us how you did it .

Part of the problem with your situation is sedos 1099 by putting over 5k in goods they may have messed you up for filing schedule d, IRS has not determined a black and white answer yet because there is little case law to support a specific way of claiming sales. The irs gave me the same answer as you if you sell a few names and it isnt your main business to flip domains you can file the schedule D. long term capitol gains if owned for more than a year and treat it just like buying a stock low and selling high, if owned less than a year then short term capitol gains. I beleive the long term capital gain is 15 percent for most people. which isnt bad. But being sedo put 5k in sale of goods block, that is the second way to claim domain sales on a schedule C. which treats domain selling as your primary business, just like a retail store outlet buying items wholesale and selling at a higher price. These are just there recomendations of the 2 ways to report income. There is a 3rd way they told me about that is if you actually considered your name a brand/TM and it was your main business and it was sold then it could be treated as property sale like selling a trademark/license etc

You might call IRS and ask if you can file a schedule D with an explanation of 1099 being filled in wrong by sedo

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