Does the capital gains tax apply to domains?

[dsiomtw]

I'm trying to figure out the best way to purchase domains that I may later decide to sell. If I were to purchase a domain today and sell it a few years from now, would I pay just the 15% capital gains tax, or would it be treated as ordinary income? If the capital gains tax applies to domains it seems to make sense to purchase them personally under my own name, as opposed to buying them through one of my businesses since corporations don't have any type of favorable capital gains tax rates. Anyone?

 

[Jeff]

Anyone?

Generally, I'd agree ... treated as "capital gains" on the U.S. Schedule D (Form 1040), IMHO. The holding period for short-term capital gains / losses is less than 1 year (typically treated at "ordinary income"), and for more than 1 year holding period is the more favorable long-term "capital gains" / losses. Of course, you should always consult with a professional and experienced tax advisor on these very important matters ... your other income, deductions, filing status, etc. may very well effect your own personal marginal tax rate, etc. :gl:

All the best!
-Jeff