TAXES: income or capital gain?

[scandiman]

Any thoughts if a domain sale is income or capital gains?

 

[Ronald Regging]

I know with stocks, unless you've had possession of it for over a year it goes under capital gains, not sure if it's the same for domains or not.

 

[scandiman]

I know with stocks, unless you've had possession of it for over a year it goes under capital gains, not sure if it's the same for domains or not.

Not sure what you are saying... profits from stocks possessed under 1 year are income, over 1 year is a gain? Real Estate has its own rules. But I have no idea how it works with other assets. Of course I am assuming a domain is considered an asset, much like other intangibles like a trademark. Anyone encountered some official IRS stuff about this issue? This sure would affect us all one way or another.

 

[fonzie_007]

Capital gains can be declared on investments held over 1 year. Capital gains enjoy a lower taxation rate. If you have not held the domain(s) for over 1 year, you must declare it as income. Additionally, if you are incorporated (all serious domainers should be incorporate for purposes of limited liability and being able to write off expenses), you will need to fill out a schedule c and declare income.

 

[Ronald Regging]

Ahh yes, Fonzie has it. I mixed it up when writing it out Sorry about that.

 

[scandiman]

Capital gains can be declared on investments held over 1 year. Capital gains enjoy a lower taxation rate. If you have not held the domain(s) for over 1 year, you must declare it as income. Additionally, if you are incorporated (all serious domainers should be incorporate for purposes of limited liability and being able to write off expenses), you will need to fill out a schedule c and declare income.

That's what I thought but I wonder if the IRS has ruled regarding domains specifically.

 

[IAmAllanShore]

Crazy good read on Domain Names:
http://www.irs.gov/businesses/small/article/0,,id=141491,00.html
(Check out how the IRS labels domain names as a "depreciating asset" ! )

Domain Names at IRS.gov (not tax related, just interesting!)
http://www.irs.gov/irm/part2/ch16s10.html

-Allan :gl:

 

[ForexPros]

I have to agree with the post above. It is all depends on the period of time you owned an asset (in this case it is a domain name). More then 12 month - gain, less - income.

 

[scandiman]

Crazy good read on Domain Names:
http://www.irs.gov/businesses/small/article/0,,id=141491,00.html
(Check out how the IRS labels domain names as a "depreciating asset" ! )

Domain Names at IRS.gov (not tax related, just interesting!)
http://www.irs.gov/irm/part2/ch16s10.html

-Allan :gl:

Wow, very cool material. Thanks to all for your input. Now I go and do year end tax estimates ...