LLC or S Corp for your domain biz?

[TheBlueprint]

If you are a solopreneur (one man business), did you set up a LLC or a S Corp for your domain business?

Also, are all domain purchases tax deductible?

 

[mhdoc]

As i understand it, the main benefit of incorporation is limited liability. It creates a lot of extra complexity since you have to file separate tax returns, etc.

I don't see much liability exposure in a one person domain business, so Sole Proprietor makes sense to me.

 

[gina ferrano]

Just to clarify sole proprietor is the more gender neutral term (some of us are women domainers) I do write off domain purchases for my main business (I'm a writer) though no LLC as of now. I have a profit so the write offs do help. If you're writing off w/o profit, after awhile the IRS will look at this as a hobby. LLC's are for those large portfolio holders and website owners IMO.

 

[enlytend]

If you deal in any "gray area" type of domains or are concerned about unintentional trademark issues, you may want to separate your domain business assets from your personal assets for legal reasons. Otherwise for just a domain business the added complexity probably isn't worth it.

BTW single member LLCs are taxed like a sole proprietor in the US and don't file separate tax returns (just a schedule C.)

Best to ask your accountant how to treat your domain purchases and domain sales income. If you are using them for your business, they generally can be treated as a business expense.

 

[TheBlueprint]

Thanks for the feedback