question Would cryptocurrency be perfect for domain sales?

[WhoaDomain.com]

I would like to know if cryptocurrencies would be a viable option for payment for domain sales?

Here's why I ask.

I recently purchased some cryptos. From my understanding you only really pay capital gains tax when you cash them out and even then only if your crypto's value went up.

See here's my idea or thought. Say I just do crypto for domain payments and the money i make from domaining I will reinvest over and over again to build a nest egg or retirement fund. If you did not use crypto you would be liable for taxes immediately as the funds are readily accessible in your account as liquid cash.

But if it were in crypto form it wouldn't be taxed until you cash it out to fiat money.

Therefore you could then use this paid crypto to buy other domains. Or even invest in other things that again won't be taxed until you cash it out like say gold or silver or even stocks or real estate.

What do you all think? Or am I missing something here?

So I guess my next question should be "are cryptocurrencies the perfect vehicle to prevent immediate taxation of completed domain sales? Allowing a domainer to turn incoming cash flow and reinvest?"

Also for that matter could we also use gold or silver as payment? Since both aren't taxable (I think) until to sell them for cold hard cash.

 

[deez007]

I have been saying this for some time now...

Soon as they have established a proper, reliable escrow type service for bitcoin payments. (there are a few around but still waiting for a reliable one) then bitcoin payments for domains will be the way to go.

Here's why: (I explain how domains are being used to launder money on a post here)
https://www.namepros.com/threads/are-previously-sold-domain-valuable.983788/

Now if you add bitcoin payments into the mix...then that will just make things a WHOLE lot easier to move money around...

I see the possibility of domains own becoming a form of currency in the future.... might not be mainstream but I can see how organized crime syndicates could fully exploit the potential of making domains into a form of currency

 

[WhoaDomain.com]

I have been saying this for some time now...

Soon as they have established a proper, reliable escrow type service for bitcoin payments. (there are a few around but still waiting for a reliable one) then bitcoin payments for domains will be the way to go.

Here's why: (I explain how domains are being used to launder money on a post here)
https://www.namepros.com/threads/are-previously-sold-domain-valuable.983788/

Now if you add bitcoin payments into the mix...then that will just make things a WHOLE lot easier to move money around...

I see the possibility of domains own becoming a form of currency in the future.... might not be mainstream but I can see how organized crime syndicates could fully exploit the potential of making domains into a form of currency

Yesssssssss! I agree! Welcome to the domain MINT!

 

[Kuffy]

Bitcoin allows for multiple signatures, so it could be good for escrow if you specify that any 2 out of 3 signatures can release the funds. SegWit provides alot more interesting options.

Not quite answering your question, but I think it's relevant for domainers. More relevant to your Q is the fact that you can roll your receipts into further domain purchases if you buy names using Bitcoin.

 

[deez007]

Bitcoin allows for multiple signatures, so it could be good for escrow if you specify that any 2 out of 3 signatures can release the funds. SegWit provides alot more interesting options.

Not quite answering your question, but I think it's relevant for domainers. More relevant to your Q is the fact that you can roll your receipts into further domain purchases if you buy names using Bitcoin.

Yep, I been keeping a close eye on SegWit developments...waiting in anticipation for it to become the standard...

 

[WhoaDomain.com]

thanks for the replies guys. but just to recap here.

The scenario would be like this.

1. Sell a domain.
2. Buyer pays me in Bitcoins via Escrow.com or DN.com
3. transaction goes smoothly. Buyer gets domain and I get bitcoins. Now what?
4. Will I have to pay tax immediately? because of the sale? is the Bitcoins taxable income? or only when you cash it out for real fiat money?
5. or can I take the bitcoins and reinvest in (hopefully) new domains without having to worry about the taxes I may or may not have to pay because of the domain sale I just made?

I think something like this would be HUGE. and yes the criminal element would jump on it.

I did hear somewhere that eventually Gov's will tax Cryptocurrencies if they haven't already. perhaps someone can provide current info or news on this? as I'm not really a bitcoin enthusiast or crypto enthusiast.

Thanks.

 

[Kuffy]

It depends on your country of residence. Governments have different attitudes to Bitcoin.

It also depends on your honesty. You can run the transaction through a mixer to try to hide it. This may not be completely successful though.

 

[WhoaDomain.com]

It depends on your country of residence. Governments have different attitudes to Bitcoin.

It also depends on your honesty. You can run the transaction through a mixer to try to hide it. This may not be completely successful though.

yea I heard about that. too much trouble better off just setting up an offshore biz account as a domain holding company like Frank Schilling and the rest. I can only imagine how much money they make from sales especially when it's all pure profit. no taxes. that's that next level sh*t. lol

but anyways. not really looking to do criminal stuff like avoid paying taxes at all just looking to see if it's legal to postpone paying taxes like how most corps do it by getting paid in Cryptos for domain sales.

I really do see it as a great tax "vehicle" because bottomline once CASH lands in "your hands" the Gov want's it's "cut" but if it's still a commodity like gold or silver or stock or real estate and not liquid? the grey area is the Gov has to wait till you liquidate into cash. and even then they are only entitled to your "profit" aka the difference between what you invested and it's value at the point of sale.

theoretically if you keep all your transactions as crypto you won't ever have to pay taxes until you finally do need cold hard cash.

you could:

1.sell a domain.
2. buy domains,real estate,gold,silver,stocks,invest in REIT, ETF's whatever.
3. and if you need cash to pay day to day just use sites or stores that accept cryptos.


I just want to know if the Gov has already or is "in the works" or actively working on taxing Cryptos "as is" once you get it?

I guess the taxation of Cryptos just like you would Fiat money is just an eventuality. right?

 

[Kuffy]

The problem that a government would have if they wanted to tax Bitcoin transactions is valuing it. Would you take the value at the time of the asset sale, or when the Bitcoin is converted. Also, without an interbank exchange rate, where would they find the value.

There is a similar problem in valuing domain names.

The other fun thing is that I believe there are some sponsors and parking companies that pay earnings in Bitcoin.

 

[D Haynes]

If you just reinvest the money into your business you can write off the tax anyway can't you? Don't get me wrong, I have zero knowledge about tax laws etc but I always thought that what you reinvest isn't classed as profit. That's why people who run companies (or at least small companies) can claim tax back on company vehicles and tools etc.

 

[WhoaDomain.com]

If you just reinvest the money into your business you can write off the tax anyway can't you? Don't get me wrong, I have zero knowledge about tax laws etc but I always thought that what you reinvest isn't classed as profit. That's why people who run companies (or at least small companies) can claim tax back on company vehicles and tools etc.

yea I thought that too but my "tax guy" told me that something like a domain sale or real estate sale the tricky part really is when there is liquid cash. technically Gov wants their cut set aside right then and there. and they will expect that at years end. they want you to set aside taxes for the sale of a house or domain at year's end and the rest you can do whatever with it.

as far as I know. it's like winning the Lotto. once you get that fat check. the Gov already has their hands in your pocket for their tax. I don't "think" you can put all of it into say a corp business and tell the Gov "oh hey! I put all the lotto money into this new company I started. sorry. I have no money for taxes!"

I seriously doubt that would go well with Uncle Sam. at the very least it would become very complicated. perhaps even merit an audit.

same thing with 101 exchanges. where you have two people with properties in desirable locations say one in Hawaii and thee other in Paris. Both owners want to buy properties in those locations. to buy and sell property once there is cash exchanged. that's a taxable "Event". but if you exchange property for property. No taxable event because it is an exchange of non liquid assets.

so long as no CASH is exchanged and ends up in anyone's pocket. no taxes will need to be paid.

so along those lines I feel this same scenario would work for bitcoins and cryptos with Domains.

 

[D Haynes]

Yeah I can see that but it's different in the UK I think. You don't pay tax on a Lotto win here and you don't pay tax on a house sale either (if it's your only house). I guess it all just depends on where you live and how nice your leaders are lol.

 

[WhoaDomain.com]

Yeah I can see that but it's different in the UK I think. You don't pay tax on a Lotto win here and you don't pay tax on a house sale either (if it's your only house). I guess it all just depends on where you live and how nice your leaders are lol.

wow! really? hmmm interesting. no tax on house sale you mean one that you've sold or one you've purchased?

so on property you purchased for investment purposes like say a multi-family rental unit? taxable?

I wonder what the rules are over at that island next to UK. The Isle of Mann? that's a tax haven right? Jeremy Clarkson lives there! lol

 

[D Haynes]

Haha I'm not sure about that. If it's your only house you don't pay tax (although you pay stamp duty which is a kind of tax I guess but it's not nearly as much as income tax) but if it's your second house, any profit from the sale is classed as an income and is taxable but only the profit. Anyway we digress lol. As for your OP I will still to money through PayPal I think.

 

[Kuffy]

PP is a fiat exchange system, It isn't new money whatever they say. It really depends if the gov recognises Bitcoin as a currency. If they do, then they have some other problems related to transaction.

Re-investing the gain from an asset sale can provide a means of deferring tax - it's called roll-over relief. It means you don't pay the tax on the gain until you sell the purchased asset. You have to pay it then of course.