Afternic - Official Thread

[GoDaddy]

Hello NamePros!
By popular demand, we have launched a dedicated feedback thread for Afternic, the GoDaddy-owned domain name marketplace.

We have created this thread as a way for you to tell us what works, what doesn't work, and what features you'd like to see at Afternic (please be constructive with your feedback). We're looking forward to hearing from the domain investment community to help us shape the future of Afternic.

We will also be sharing Afternic product updates in this thread.

Please note that this thread is not meant for support. Please email our support team at [email protected] for assistance.

 

[Future Sensors]

Here's what Gemini has to say about it.

You've hit on a critical point of confusion and potential misinterpretation regarding 1099-K reporting, especially as it relates to platforms like Afternic (and its parent company GoDaddy). Here's a breakdown of the issue:

Understanding 1099-K:

• The 1099-K form reports gross payment volume received by a seller through third-party payment processors.
• It is designed to capture the total amount of transactions, before any fees or commissions are deducted.
• The IRS's intent is to have a clear picture of the total sales activity of individuals and businesses.

The Afternic Example Breakdown:

• Gross: $10,000 (Sale Price) - This is the "gross" amount, the total sale.
• Deductions:
  • $2,000 (Afternic Commission)
  • $1 (Bank Transaction Fee)
• Net: $7,999 (Net Payment) - This is the "net" amount, what you actually received.
• 1099-K: $10,000 - This is the "gross" amount that will be reported to the IRS.

The Key Issue:

• You are correct to be concerned about the discrepancy between the $10,000 reported to the IRS and the $7,999 you actually received.
• The 1099-K reports the gross sales, not the net income.
• This is not "inflating" anything for GoDaddy's benefit, but it is adhering to the IRS rules regarding 1099-K.
• It is very important to understand that the 1099-K is not a profit and loss statement. It is a gross transaction statement.

What This Means for You:

• Income Reporting: You will need to report the $10,000 as gross receipts on your tax return.
• Expense Deductions: You can then deduct the $2,000 Afternic commission and the $1 bank transaction fee as business expenses. This will reduce your taxable income.
• Accurate Records: It is crucial to keep accurate records of all your sales and expenses. This will ensure that you can properly reconcile the 1099-K with your tax return.

Clarification and Recommendations:

• Consult a Tax Professional: It is always best to consult with a qualified tax professional for personalized advice. They can help you understand how the 1099-K affects your specific tax situation.
• Contact Afternic/GoDaddy: While they are likely adhering to IRS rules, it is still worth contacting Afternic/GoDaddy customer support to clarify their reporting practices and confirm that they are providing accurate information.
• IRS Publications: Review IRS publications related to 1099-K reporting and business expenses.

In summary:

• The 1099-K reports gross sales, not net income.
• You will need to report the gross sales and then deduct the commissions and fees as expenses.
• Keep accurate records and consult a tax professional for personalized advice.

 

[Acroplex]

The reporting example above is accurate for a 1099-K form. You report the full amount minus expenses, fees, etc. Not sure what type of form is sent to sellers in Europe but there it's VAT hell to consider.

 

[bmugford]

The email I received included this example:

Example:
Sale Price: $10,000
Afternic commission: ($2,000)
Bank transaction fee: ($1)
Net payment: $7,999
Form 1099-K reportable amount: $10,000

This example suggests (actually states) that they are going to include and report commission as income to us as seller. The commission amount never has been or was paid to me. Maybe this is counterintuitive accounting magic that is done to inflate something favorably for GoDaddy but GoDaddy telling the IRS that they paid me $10,000 when, in fact, they only paid me $7,999 seems to be a problem and factually inaccurate.

I seriously welcome clarification and education on this. Maybe I can contact one of Afternic's tax accountants via chat.

A lot of these 1099 reporting rules are new this year, which is creating quite an issue for companies and CPA.

Some people have been taking payments on behalf of a company or partnership, now they get reported to them personally among other issues.

Technically this is "information" only, but the late revision is not helpful.

Companies are generally supposed to report gross payments, then you deduct commissions, cost, expenses, etc.

You are not taxed on gross, you are taxed on net.

You could lose money in theory, even if GoDaddy paid you $100K. For instance, if you actually paid $150K for the domain.

There is not really much excuse for a multi-billion dollar company like GoDaddy messing this up and catching it so late.

Brad

 

[bmugford]

It is designed to capture the total amount of transactions, before any fees or commissions are deducted.

Afternic sellers, on top of the 15% - 20% commission, don't forget to deduct that extra $0.90 fee GoDaddy charges on every Afternic ACH payment.

Brad

 

[Future Sensors]

Gross: $10,000 (Sale Price) - This is the "gross" amount, the total sale.

Further complicating matters, the sales price Afternic communicates to the seller may not reflect the final amount paid by the buyer. Afternic's partners often add additional markups, potentially resulting in a higher transaction value. Consequently, the IRS may still receive an inaccurate representation of the total transaction amount.

@GoDaddy

 

[Acroplex]

Further complicating matters, the sales price Afternic communicates to the seller may not reflect the final amount paid by the buyer. Afternic's partners often add additional markups, potentially resulting in a higher transaction value. Consequently, the IRS may still receive an inaccurate representation of the total transaction amount.

@GoDaddy

That's not possible. The sales price sets the starting point for the seller's earnings amount which is then lowered by commission fees etc. There *might* be an issue with non-USD listings due to currency conversions, but that's a random guess.

If your Afternic sale was recorded at $10,000 dollars in your account, that's the gross sale amount.

 

[Future Sensors]

That's not possible. The sales price sets the starting point for the seller's earnings amount which is then lowered by commission fees etc. There *might* be an issue with non-USD listings due to currency conversions, but that's a random guess.

My interpretation was based on this info. The Afternic partner network makes it more complicated.

Understanding 1099-K:

• The 1099-K form reports gross payment volume received by a seller through third-party payment processors.
• It is designed to capture the total amount of transactions, before any fees or commissions are deducted.
• The IRS's intent is to have a clear picture of the total sales activity of individuals and businesses.

 

[Future Sensors]

In other words, does the IRS want insight into the entire transaction, or just the part that concerns the Seller?

 

[bmugford]

My interpretation was based on this info. The Afternic partner network makes it more complicated.

Understanding 1099-K:

• The 1099-K form reports gross payment volume received by a seller through third-party payment processors.
• It is designed to capture the total amount of transactions, before any fees or commissions are deducted.
• The IRS's intent is to have a clear picture of the total sales activity of individuals and businesses.

This 1099 thing is going to be a clusterfuck for accountants this year.

I talked to my CPA, and she had to go to a bunch of advanced education about it.

It's an entirely new process that is going to lead to headaches, so to incorrectly do it in the first place and correct it so late is not really acceptable.

GoDaddy's financial and legal departments are massive. They should have been well aware of what was required on their end.

Brad

 

[Acroplex]

In other words, does the IRS want insight into the entire transaction, or just the part that concerns the Seller?

The IRS taxes income across all parties. But the 1099-K sets the basis (gross income) for the seller.
In the EU you also have VAT to consider which is why GD decided to act as the mediator on all transactions. Prior to that, the seller and the buyer were listed as part of the transaction at Dan.com; that changed later. Perhaps it suits GD's revenue numbers as well.

 

[bmugford]

I filed extensions.

I will let the new 1099 stuff settle down before I worry about it in several months.

If you owe money, filing taxes quickly is not that exciting.

Brad

 

[Future Sensors]

Anyone interested in a tax BOOST? Thanks, GoDaddy.

 

[bmugford]

Anyone interested in a tax BOOST?

Afternic Boost = extra tax deduction.

Instead of 15% you can deduct 20%!!!

That sounds like some TikTok financial guru advice.

Brad

 

[Future Sensors]

Afternic Boost = extra tax deduction.

Instead of 15% you can deduct 20%!!!

That sounds like some TikTok financial guru advice.

Can we confirm that this is limited to the DDC Premier tier?

 

[NicTraders]

Can we confirm that this is limited to the DDC Premier tier?

I think Afternic would refer you to their chat support as the best way to get timely assistance on that one. lol

 

[Jannes]

This email came about 10 minutes after I enabled Fast Transfer

10 hours later, the domain is in my Porkbun account and at Afternic there are no signs of it selling, so I don't think the message means what it says it means. Doesn't build my confidence in the FT system, tbh (that's why I'm posting the issue on this thread).
@Porkbun

 

[Future Sensors]

This email came about 10 minutes after I enabled Fast Transfer

Got the same email, also after about 10 minutes after changing the price for a renewed domain in the Afternic Dashboard.

 

[Future Sensors]

Got the same email, also after about 10 minutes after changing the price for a renewed domain in the Afternic Dashboard.

Just received another one, for another domain.

@GoDaddy please fix.

 

[GoDaddy]

The email I received included this example:

Example:
Sale Price: $10,000
Afternic commission: ($2,000)
Bank transaction fee: ($1)
Net payment: $7,999
Form 1099-K reportable amount: $10,000

This example suggests (actually states) that they are going to include and report commission as income to us as seller. The commission amount never has been or was paid to me. Maybe this is counterintuitive accounting magic that is done to inflate something favorably for GoDaddy but GoDaddy telling the IRS that they paid me $10,000 when, in fact, they only paid me $7,999 seems to be a problem and factually inaccurate.

I seriously welcome clarification and education on this. Maybe I can contact one of Afternic's tax accountants via chat.

Hi @Garet,
We apologize for any confusion or inconvenience this has caused. However, we're unable to provide support for this through NamePros or social media, which is why we recommend reaching out to Afternic's support team.

Alternatively, your Premier Services rep and Afternic account manager are both informed and may be able to assist you with specific questions.

This email came about 10 minutes after I enabled Fast Transfer

Show attachment 272545


10 hours later, the domain is in my Porkbun account and at Afternic there are no signs of it selling, so I don't think the message means what it says it means. Doesn't build my confidence in the FT system, tbh (that's why I'm posting the issue on this thread).
@Porkbun

Thanks for letting us know, @Jannes and @Future Sensors. We'll escalate this with the Afternic team.

 

[kor]

Fast transfer network notifications have been problematic for a while. I keep getting "activate fast transfer" email for a domain name priced at $145,000 every day.

As far as I know, fast transfer participation over $100,000 is not possible.