Tax question - When to claim

[Debt.tv]

I have sold 2 domains on Sedo this year. 1 for $80 and 1 for $2500. These sales combined with private sales (that I will not claim) pretty much break me even when it comes to my domain name investments. Should I claim this on my Taxes or should I just ignor it?

At what $ value would you start claiming on your taxes, if by chance I were to sell more?

I don't make money on parking so the only income would be from sales.

I was just wondering if the IRS is going to come looking for me at tax time if I don't claim these sales?

Thanks in advance!

 

[mhdoc]

Why not include it as part of a schedule C? Since you're net is close to zero you won't pay any significant tax. If you show a small profit it establishes your business so you don't have to worry about being declared a hobby if you report losses in future years.

It also means possible future discussions with the IRS will be along the lines of "How much or How little", not "Some or None". That's a much stronger position.

 

[Debt.tv]

Why not include it as part of a schedule C? Since you're net is close to zero you won't pay any significant tax. If you show a small profit it establishes your business so you don't have to worry about being declared a hobby if you report losses in future years.

It also means possible future discussions with the IRS will be along the lines of "How much or How little", not "Some or None". That's a much stronger position.

Should I start doing business as a business? I have been operating on as an "Individual", similar to selling on ebay (which I do very rarely).

The real question is, "does the IRS know I sold a domain on SEDO if I don't tell them?" It just seems like a lot of work for the small dabbling I have done in domaining (very part-time). I feel like I got lucky and got my money back and I have only registered like 2 names since the big sale.

Now if it was like a profit of $5000 or so, I would claim it, but for this I am still on the fence.

Is there anyone who is sitting in the same boat as me, low # of sales, zero or low income. Are you claiming these sales on your taxes?

Has anyone not claimed domain sales on their taxes and been audited or questioned by the IRS for not claiming them?

 

[domainsusi]

Sedo will send a statement of your income to the IRS and you will receive a copy at the beginning of the year.

Better not ignore it ....

 

[npcomplete]

I have sold 2 domains on Sedo this year. 1 for $80 and 1 for $2500. These sales combined with private sales (that I will not claim) pretty much break me even when it comes to my domain name investments. Should I claim this on my Taxes or should I just ignor it?

At what $ value would you start claiming on your taxes, if by chance I were to sell more?

I don't make money on parking so the only income would be from sales.

I was just wondering if the IRS is going to come looking for me at tax time if I don't claim these sales?

Thanks in advance!

Try taking the high road: declare everything. The IRS is not the kind of government organization you want to mess with.

I declare everything greater than zero. Even so, I was audited a few years back. They came to our home and spent two days going through three years of financial records... they look at your bank records, charge cards, you name it, they want to look at it. If you don't have the records they will require you to get them. We were operating several businesses, and the records were massive. In the end they dinged me for $1000 chump change in penalties over a difference of opinion on what is deductible. The IRS always wins those arguments. The funny part is that those two days of auditing plus the support infrastructure at the IRS probably cost them several thousand dollars to get that $1000. Nobody said the IRS or government in general is "cost efficient"

 

[hookah]

IRS looks like Instant Robbery Service to me.

 

[npcomplete]

IRS looks like Instant Robbery Service to me.

LOVE IT. I will use that one. rep added.

I just finished my 2007 taxes last night. grrrr.... This is the *earliest* that I have ever been late in tax filing. One month before the late extension is due. A new personal record.