No Domain Tax

[corgi]

Why don't all Big Domainers (or even normal, successful domainers) live in the Cayman islands - just like Frank Schilling, so they pay no taxes?

That's a significant competitive advantage.
you'd be saving/gaining 35%! (the highest US tax bracket, for people making $360K+)

 

[JGK]

You still need to pay taxes even if you live abroad (as I am, right now).

There are slightly different rules under certain circumstances (foreign income exclusion, credit for foreign income tax, maybe some others). Still, it's not likely that much if any would qualify for those in such a situation.

Disclaimer: I'm not a tax professional. Don't take this as professional advice. I also may be wrong.

 

[wot]

One of the disadvantages of worldwide taxation which I think applies to Americans, Australians ? and quite a few other countries.

On the other hand some of us are fortunate. :gl:

 

[Sam]

You still need to pay taxes even if you live abroad (as I am, right now).

There are slightly different rules under certain circumstances (foreign income exclusion, credit for foreign income tax, maybe some others). Still, it's not likely that much if any would qualify for those in such a situation.

Disclaimer: I'm not a tax professional. Don't take this as professional advice. I also may be wrong.

only up to 80,000 a year income do you get exclusion PLUS you have to pay a stupid 15% self employment tax.... so not so hot.

 

[Michael]

While it is true that US citizens living abroad are still subject to US taxes, as Sam mentioned you can exclude $87,600 of income per spouse. So as long as Frank keeps most of his profits in the corporation, and only pays himself and his wife out $175,200 in salary each year (way more than enough in the Caymans), he won't pay any US taxes.

FYI, I'm not a tax professional.

 

[JGK]

While it is true that US citizens living abroad are still subject to US taxes, as Sam mentioned you can exclude $87,600 of income per spouse. So as long as Frank keeps most of his profits in the corporation, and only pays himself and his wife out $175,200 in salary each year (way more than enough in the Caymans), he won't pay any US taxes.

FYI, I'm not a tax professional.

There are additional requirements (for one, the income has to actually be foreign earned, too).

 

[Kate]

isn't Frank Canadian ?

 

[Domagon]

Key is setting up various corporate structures. Through those, utilizing various accounting practices, one can move money, assets, liabilities, etc around in such way to legally minimize their taxes.

For most domainers, setting up offshore entities along with all the accounting stuff is not practical due to the costs and complexity involved.

IMHO, it's not worth the bother unless one is netting high 6-figures, or more realistically, millions of dollars per year.

Ron

 

[Sam]

There are additional requirements (for one, the income has to actually be foreign earned, too).

Sedo is located in Germany. Therefore I can make the substantiated claim that is is "foreign earned".

Plus, living abroad for more then 330 days out of a year qualifies me for the foreign exclusion credit. Still that 15% is a bitch!

 

[bmugford]

It is not feasible for most domainers to try to avoid taxes. First of all I doubt more than 20% of domainers turn any kind of profit. Of that, I bet less than 5% make any substantial profit.

It is not really worth trying to be cute on taxes unless you have really good financial advice.

Brad