Taxes and domain names

[dna]

Is it possible to treat the sale of a domain name the same as the sale
of a stock, as capital gains, which is currently taxed at 15%
for a stock held for more than a year?

 

[axus_auto]

Interesting ... I want to know too

 

[fatter]

The way it was explained to me by the 20th IRS agent I spoke with is if you sell the domain as a brand/trademark/established business then it can be claimed as capitol gains, or in some cases as a casual sale ie you sell one name every few years and isnt a consistent business practice of buying and selling names, although they stated this is still a grey area because there are no court cases which ruled either way and being congress hasnt passed a law yet, the IRS sets policy and waits for case law to back them up or prove them wrong, They also said if you buy and sell names as a practice then domains are treated same as products and a schedule C would be used, domains being inventory. I am not an attorney just relaying what the IRS told me
Joe T

 

[interestedenough]

Thank you for this information; it is very valuable.

 

[dna]

From Wiki:

"A capital gain is a profit that results from investments into a
capital asset."

"The United States defines a capital asset by exclusion.
Capital assets include all assets except inventory of
supplies or property held for sale."

This makes me think that the best thing you can do is to
hold your domain name for a long period of time in order
to prove that it is an investment. You need to hold it for a
year anyways to take advantage of the capital gains 15% tax rate.

 

[jberryhill]

You can ask the same question about anything, really.

How would you characterize the sale of a bicycle, if:

(a) you are a person who owned the bicycle for personal use; or

(b) you are a company that rents bicycles, and every two years you buy a new fleet and sell the old fleet.

What matters is what the bicycle is to you.

 

[dna]

Romney has just promised, that if elected President,
he will end all taxes on interest, dividends and
capital gains.

 

[liquidcherry]

Romney has just promised, that if elected President,
he will end all taxes on interest, dividends and
capital gains.

And i promise if i am elected president i make the moon shine brighter.......

Cheers

Liquid