question US Domainers: Ever gotten a 1099 ?

This is an excellent question. Recently, we have only had direct sales so we cannot provide useful feedback. In the past, four years ago, we did not receive a 1099 from GoDaddy Auctions for a $4600 sale. Are you receiving payments as an individual or company (LLC, S-Corp, etc.)?

I've received them for ppc, but not for sales

imo...

The marketplace is an intermediary and wouldn't owe you a 1099, I don't think.

As a Canadian I did not know what a 1099 was until I looked it up!

I found the following. Not obvious to me that it would apply to a domain transaction at a marketplace but obviously I am not an accounting expert (or in much of anything else actually )

https://www.irs.gov/forms-pubs/about-form-1099-misc

Yes, when the money came from a domain buyer, the marketplace doesn't owe the seller a 1099.
Also, I'm not if the form would be appropriate anyway when it might be an asset you're selling and reporting the income as capital gains -- if you were not, say, a domainer but held just a few domains.

Amazon and ebay (even Paypal for business accounts) send out 1099K. Since they operate the same as a domain marketplace (they take payment, remove commission, then send you the rest of the money), I figured they would send a 1099-MISC or 1099-K. However, I have since learned that Amazon only issues the 1099-K if sales are over $20K. Maybe this is what the domain marketplaces do, too? I certainly never accrued $20K in any one given year on any one of these marketplaces so that could be my answer.

I sold a domain last fall for $36.5k (I am not a domainer, and this is only my 2nd sold domain ever, previous was for like $1500 maybe 4 years ago)... The buyer did the transaction through Escrow.Domains. I did not receive a 1099-MISC until just an hour ago after I contacted Escrow.Domains this morning asking about it for my taxes.

I am not really sure what I am doing with regards to reporting of the domain for taxes since it was a personal asset and I am not in the business of selling domains... I am trying to work through doing my own taxes this year, but considering going to our professional tax person because of this... any advice appreciated (and of course I know you're not a tax professional with your advice)

slinkster said:

I sold a domain last fall for $36.5k (I am not a domainer, and this is only my 2nd sold domain ever, previous was for like $1500 maybe 4 years ago)... The buyer did the transaction through Escrow.Domains. I did not receive a 1099-MISC until just an hour ago after I contacted Escrow.Domains this morning asking about it for my taxes.

I am not really sure what I am doing with regards to reporting of the domain for taxes since it was a personal asset and I am not in the business of selling domains... I am trying to work through doing my own taxes this year, but considering going to our professional tax person because of this... any advice appreciated (and of course I know you're not a tax professional with your advice)

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From what I have read about it, accountants have 2 different views on domain sales.

On one hand they seem to treat it like any other retail sales business despite that fact that it's an intangible item, and the fact that you tecnically do not own a domain, you rent it for a yearly fee. Some people equate this to paying property taxes on real, tangible property. You only "own" the property if you pay the yearly/semi-anual taxes on it. Which leads to the second type of accounting for domains...

Some accountants say they need to be reported as either short term or long term capital gains. Short term would be if the domain was held for 1 year or less before the sale occurred, longer term if the domain was held for 1 year and 1 day or longer before the sale occurred.

In your case, it may be more appropriate to report as capital gains, BUT I'm far from a tax professional.

thanks Ebook. Yea, I've owned it for about 15 years... tried to do a startup with it back in 2005-2010, but it never did anything (never made a dime), so it at as a personal asset since then as I thought of ideas for it... then out of nowhere someone solicited to buy from me last year. They also bought the corresponding twitter handle. $35k for domain and $1.5k for Twitter handle.

Domain accounting is not really black and white.

They could be classified as intangible property or as a lease.
You could account for them as ordinary income, short term or term capital gains (if applicable).

Domains have an underlying cost and would not qualify for a 1099.
That is meant more for things like parking revenue.

I mean you don't give a 1099 to a car dealer when you buy a car.

If sales would qualify for a 1099-K is debatable, but even then the requirements are $20K+ total payments AND 200+ transactions in a year. You would have to meet both requirements.

Whether you get a 1099 or not, a sale is still income that should be reported.

Brad

I understand that reporting sales is required, 1099 or not.

Although, thanks for stating this because a lot of people think they don't have to report income if they are not issued a 1099.

EbookLover said:

a lot of people think they don't have to report income if they are not issued a 1099.

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typically, you won't receive a 1099, if ppc earnings are below a certain amount.
so, what is there to report?

the advantage of reporting, would be to offset expenses, like domain renewals, purchases, internet cost, etc.

then you got to do the long form

* I am not a tax lawyer or accountant

imo…..