question US LLC: Tax for selling my first domain: VAT? Income Tax? (via GoDaddy brokerage).

[mirrorneuron]

Hi there!
I'm selling a domain name that was registered under the name of my US LLC. Wondering about taxes. I know there are existing threads, but they don't seem to be about US LLCs.

1) What kind of taxes are triggered by a domain sale by a US LLC (Wyoming)?
- VAT/Sales tax? (I don't have nexus in the US/Wyoming)
- Capital gains?
- Income tax?

2) The sale is brokered by GoDaddy, so they're the ones paying out the money. Anyone has experience about GoDaddy brokerage specifically and how to set it up with them? The agent by email said the amount I was due to receive was "net", and when I asked him about what taxes I should consider he replied (verbatim):
"There is no tax implication for the seller as we do not report the sale individual sale. If taxes are applicable for the buyer they will be charged by us to them. The sale would essentially be done from you to Go Daddy and then from us to our client.".
But if the IRS asks me what that godaddy transfer is about, how does it help me when they don't report individual sales?

What do I have to keep in mind to make sure it's all above board? Otherwise, how is this kind of sale treated, does it trigger capital gains tax, income tax, ..?

3) non-resident (foreign owned) LLC situation
Another point about my situation is super specific, and I don't expect answers about this, but will mention anyway: it's a foreign owned LLC - so I'm not American. It's called a pass-through entity, so most taxes (like income tax) are owed at the place where I live, not the US. But I can figure that out myself after I know what taxes normal LLCs owe.

 

[VadimK]

You need to talk to the good accountant in your country, no one here will be able to answer your question as it lies in the sector of accounting (and quite a specific part of it), not a domaining. There are lots of nuances: who exactly is the seller? (company, individual, and also whether he is from a US, EU or non-EU country? ) Same question goes for who the buyer (you!) is. Also if the organisation where you receive the money from is acting as a seller or intermediary between you and a seller.

You don't have to respond to any of this to me here, I won't be able to help you more - just showing that the subject is quite complicated and to deal with it correctly it needs to be addressed to a professional accountant in your country.

Good luck!

 

[FDR]

I get your point, but don't you think a domain sale by a US LLC is one of the most common ones for people in this forum?
Apparently US individuals even get tax benefits if they sell via an LLC rather than individually.
And a US LLC is hands down the most popular "registered company abroad" solution by people around the world.
So I do think this topic affects a lot of people and is worth exploring further.
Also the approach by GoDaddy - don't you think that's interesting what he wrote?

 

[karmaco]

We are not tax professionals. Talk to one.

 

[VadimK]

I get your point, but don't you think a domain sale by a US LLC is one of the most common ones for people in this forum?
Apparently US individuals even get tax benefits if they sell via an LLC rather than individually.
And a US LLC is hands down the most popular "registered company abroad" solution by people around the world.
So I do think this topic affects a lot of people and is worth exploring further.
Also the approach by GoDaddy - don't you think that's interesting what he wrote?

Where do you come with this from? Why would the US LCC be the most popular solution for people abroad? Do you think that in addition to paying taxes in my country I am desperate to pay taxes in the US as well? ))
I run my Ltd company in Spain, someone else in the USA, another person in Russia, somebody in Germany etc. And your question lies into the subject of tax regulation about these kinds of operations in each country.
That's why again - you need an accountant, a tax advisor. ))