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Domain sales: Tax Question

Labeled as discuss in Domain Selling and Domain Sales started by BlackCatsAreNice, Oct 17, 2019.

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  1. BlackCatsAreNice

    BlackCatsAreNice Established Member

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    Hello,

    I know the question of taxes and domain sales have come up before so forgive me if this is a re-hash. I have gone through some previous threads and still don't have a clear idea of how to proceed.

    I'd like to keep my filings simple. I have a "day job" and domaining is a side hustle. I've mainly been investing in domains with occasional sales. I average 1-3 sales a year.

    Can I "keep it simple" and just enter data from my W2 form as usual and have profits from my domain sales filed under *miscellaneous* and be done with it?

    I went to a CPA with my W42 and print outs of my Escrow.com sales but he keeps telling me I need a 1099 from from which I don't have.

    All my sales are via Escrow.com and funds deposited directly to my checking account. So the communication from Escrow.com (in the form of a "closing statement" email) and the record of the deposit from Escrow.com into my checking account are the only two evidence of the sale.

    I am in the process of exploring setting up an LLC or some other structure but since I sell so sporadically, I don't know if it makes sense.

    Thanks for any help!
     
    Last edited: Oct 17, 2019
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  2. karmaco

    karmaco Top Member VIP

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    If you have 1 to 3 sales a year and another income entirely you definitely can add it under other income or miscellaneous. Shocked the accountant doesn’t know better with so many freelancers, mini gigs and partially self employed nowadays. If your domain business grows there is alot if great software out there specifically for self employed small business owner and LLC is an option. I would not recommend it as being necessary for a hobbyist.
     
  3. BlackCatsAreNice

    BlackCatsAreNice Established Member

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    Thank you for the advice. That's what I am leaning towards but your words give my some confidence.
     

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