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Domain taxes

Labeled as discuss in General Domain Discussion, started by MarketingStrategies.com, Mar 15, 2018

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  1. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    That's not how taxes work bro. You can't just keep reinvesting to avoid taxes.
     
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  2. lock

    lock DomainUsed.com VIP

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    It is inevitable that you have to pay tax but it is on the profit if your business fails to make profit or the percentage then it effects tax bracket. Taxes are different in every country.
     
  3. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    that's right, different to what you said before though.
     
  4. alcy

    alcy Top Contributor VIP

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    actually, I think he said quite the same thing. he just used different words ;)
     
  5. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    this. Not true.
     
  6. alcy

    alcy Top Contributor VIP

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    yes I know.. but I was talking abou this 2nd comnet.. where he said same thing in different words.. that as long as you reinvest verythign then you are not making profit therefore nothing to show taxman
     
  7. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    I'll say it again, you can't reinvest profits in more domain names to escape taxes.

    You can make deductions for ongoing business/ operation expenses. Even write-offs, if you hand register a bunch of junk and let it drop, this should be a permissible deductible.
     
  8. alcy

    alcy Top Contributor VIP

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    let's keep things simple.. you are taxed on net gains PER GIVEN YEAR
    so if you reinvest all profits during same year, and therefore have no net gain to show.. then you have no tax to pay
     
  9. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    lol no.

    You also appear to be also mistaken in thinking you can just keep buying domains with your domain profits tax-free.

    If everyone could just keep reinvesting profits tax free, wouldn't that be great!
     
  10. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    If you are in the business of buying and selling domain names, and your cost of buying domains exceeds or equals your profit of selling domains any given year, what will be your taxable income? Please explain.
     
  11. alcy

    alcy Top Contributor VIP

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    lol
    it will be nothning
    same thing if you break even.. your net profit for the year is 0$
    which is what im trying to explain lol
     
  12. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    Me too.
     
  13. alcy

    alcy Top Contributor VIP

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    yes but for some reason the dude ain't buying it ;)
     
  14. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    And it wouldn’t be tax free. If you sell for more than you buy, which you hopefully will eventually, you will have to pay tax.
     
    Last edited: Mar 16, 2018
  15. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    The dude has never paid tax.
     
  16. alcy

    alcy Top Contributor VIP

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    haha ;)

     
  17. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    Your domain names are your inventory. When you make a sale, your profit is based on your cost of goods sold (your acquisition cost for the name), less any deductions you can make.

    If I own 10 domains and sell 1 of them for $10k which I purchased for $1k, my gross profit would be $9k.

    Then from here, I deduct my legitimate operational costs e.g the renewals on the other domains, maybe I can add in a computer purchase I made, the internet and electricity, home office space deduction etc....

    After I deduct these operational expenses, let's say they amount to $3k.. $9k-$3k = $6k

    What can't be done is to just keep buying domain names, e.g buy a a couple more domains and claim that no profit was made. Does that make sense now?
     
  18. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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  19. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    Tax YEAR.
     
  20. lambo.com

    lambo.com Restricted (15-30%) Gold Account

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    Your logic that you can make millions in domains but as long as you can keep buying fresh inventory with profits, tax man never gets anything is dangerous I feel. @Michael Cyger has a site on domain taxes, what does that say..
     
  21. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    Sometimes when I’m buying, the tax man makes me do it.
     
  22. alcy

    alcy Top Contributor VIP

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    dude..............

    if you reinvest the 9k you made into buying more inventory for your business (domains) then you have no net profit for that year to report.

    til you sell what you bought..
     
    Last edited: Mar 16, 2018
  23. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    The logic is quite simple. If any given deal is to be instantly taxable, business in general would be impossible. It already is where I live, but that’s another question.
     
  24. Recons.Com

    Recons.Com Top Contributor VIP

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    What is that website?

    @alcy what he is saying is that your domain purchases may not be treated as operational (deductible) expense for the year, unless you write them off. Just like you cannot buy a building and claim it as an expense.
     
  25. trelgor

    trelgor Established Member ICA Member ★★★★★★★★★★

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    I’m paying tax for the first time for 2017. Never took profit until now. There are two options to claim with authorites here. I’m not in the US. You can claim that you are an investor, and that domains are similar to, say stock, or you can admit it is a business. I would love if they bought the stock argument, as tax percentages will be lower. That would also mean that purchases could not be written off, until they are liquidated. But they probably won’t buy that.

    A business pays tax on profit.
     

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