Writing off renewals as a business expense?

[bgmv]

If you register all your domains under your "business" and it is time for a renewal, is there anyway you can write off the renewal fees as a business expense? Does anyone know the answer, before i renew my domains!

 

[BayDomainer]

As long as when you have income from your domains from either parking or selling it goes into the "business." I'm pretty sure.

On your personal taxes I believe the IRS gives you 3 years to determine if this is a business or a hobby.

 

[bgmv]

As long as when you have income from your domains from either parking or selling it goes into the "business." I'm pretty sure.

On your personal taxes I believe the IRS gives you 3 years to determine if this is a business or a hobby.

so as long as youve got documented "business" revenue, regardless if its $1 or $1million? couldnt anyone do this, just transfer over their names to a "business" name and make sure that their parked.com accounts point to their business accounts? it just seems too easy.

 

[-REECE-]

Indeed it is.

Safest thing to do would probably be to write it off over 5-7 years. If you get audited, you'd likely have a hard time suggesting that a domain name has a lifespan of less than 5 years.

Get yourself a good accountant. Best investment you'll ever make :imho:

so as long as youve got documented "business" revenue, regardless if its $1 or $1million? couldnt anyone do this, just transfer over their names to a "business" name and make sure that their parked.com accounts point to their business accounts? it just seems too easy.

 

[NameCharger]

overstating the obvious

If you register all your domains under your "business" and it is time for a renewal, is there anyway you can write off the renewal fees as a business expense? Does anyone know the answer, before i renew my domains!

Renewals cost us money and are an ongoing, necessary expense.

 

[domainer50]

Do you domain as a business? Or do you domain as more of a hobby

 

[bgmv]

I lost track of this post. Want to revive it.
I just adjusted all my domains to my company name. Should I create a seperate paypal for business, that way any sales or ad revenue filters through that? When it comes time to renew, should I pay with a business CC? If I write off 3 year renewals for all my LLLL I will show a loss, is that ok?

 

[tricolorro]

Indeed it is.

Safest thing to do would probably be to write it off over 5-7 years. If you get audited, you'd likely have a hard time suggesting that a domain name has a lifespan of less than 5 years.

Get yourself a good accountant. Best investment you'll ever make :imho:

:hi:

Writing off domain renewals over 5-7 years makes no sense since the
life of the renewal is only one year.

In general, you only expense over time those things have a longer life.

"Get yourself a good accountant" is the best advice.

Patrick

 

[bgmv]

:hi:

Writing off domain renewals over 5-7 years makes no sense since the
life of the renewal is only one year.

In general, you only expense over time those things have a longer life.

"Get yourself a good accountant" is the best advice.

Patrick

If the life of the renewal is only 1 year then cant you just write it off one year at a time, year by year? renewing a domain is a critical part of selling it, if you have the intention of making a profit then shouldnt the renewal be regarded as an expense, regardless of its life?

 

[mhdoc]

I think the longer write off period would only apply to domains purchased for more than the registration fee. The re-registrations themselves seem to me to be an obvious business expense. Based on the RegisterFly situation I think renewing for longer periods of time should also be an expense that would be easily defended as a necessary business decision.

I would be a little careful about changing the ownership information. It looks like a sale. I dropped my income from one of my sites by 50% and it took almost six months to recover. The only change I made to the site was the ownership information at the registrar.

 

[bgmv]

The only change I made to the site was the ownership information at the registrar.

That is exactly what I did, I changed all the registrant info at GD, etc.

 

[domainerph]

I would be a little careful about changing the ownership information. It looks like a sale. I dropped my income from one of my sites by 50% and it took almost six months to recover. The only change I made to the site was the ownership information at the registrar.

Does change in ownership affect revenue/income ?

 

[tricolorro]

I think the longer write off period would only apply to domains purchased for more than the registration fee.

:hi:

Now that would seem to make sense.

What if you sell that expensive domain the first year for mucho dolares?

What if you lose it right away in a UDRP decision?

There really isn't much to go on since the IRS hasn't caught up
with domaining...yet.

Even an experienced accountant can only use his or her best judgment.

When domainers start getting audited...then them rules will be a coming!

I haven't read it yet but the Domain Tax Guide has some relevant guidelines.
http://www.domaintaxguide.com/

Patrick

 

[mhdoc]

I had an established content site for which I decided it was time to move it from my personal name to a business name. I didn't change anything except the owner at the registrar. My AdSense income tanked for several months. I presume, but did not document, as a result of falling in the SERP's for many search terms. I assume, but could not prove, the search engines do that because a new owner often means significant site changes.

 

[duceman]

This can be a complicated issue. The best thing to do if you've made any documented profit is to consult an accountant that has dealt with digital assets ect..

 

[mhdoc]

What if you sell that expensive domain the first year for mucho dolares?

What if you lose it right away in a UDRP decision?

Short term capital gain? You better not have spent all the profits

Short term loss? Limited to $3,000 per year unless you have other gains to net against?

I agree the rules are not well established. However, the many apparent similarities to real estate make it seem like the same sorts of value judgments would hold.

I think a key point to remember is you must always have a business reason for your actions. For example, "My domain registration expenses are three times normal because I felt compelled to register my domains for at least three years in advance in light of the RegisterFly meltdown. People lost valuable domains because they were not able to renew on time and it took years for the powers that be to take action."

This can be a complicated issue. The best thing to do if you've made any documented profit is to consult an accountant that has dealt with digital assets ect..

I agree it is a complicated issue and you should consult with an experienced accountant.

I would also suggest that accountants don't enjoy audits either and it looks bad if to many of their clients get audited. Thus they have a natural bias toward conservative choices. The taxpayer owes it to himself to study the rules and regulations and come to his own decisions after careful consideration of the professional advice.

 

[bgmv]

I really appreciate everyones help, I will research this topic more thoroughly and try to come up with some educated decisions. Has anyone here ever got audited before, because of expense (domain) write offs?

 

[Name Trader]

You might find this thread an interesting read... http://www.namepros.com/parking-and...377342-legal-tactics-reduce-irs-tax-owed.html

 

[bgmv]

You might find this thread an interesting read... http://www.namepros.com/parking-and...377342-legal-tactics-reduce-irs-tax-owed.html

Stub thanks alot. that helped. rep added

Just found a great link from Monte Cahn (Moniker), tells you alot about tax expenses for domaining. very informative read.
http://www.moniker.com/domain-masters/ep-2005-05-18/page-1.jsp