| Re: Tax, is this legit?
heres what the IRS told me, by the way i got 3 different answers from 3 different people. I posted an email somewhere here a few months back too that the irs sent me. what they told me is if you build a brand around your domain name then the domain becomes like a trademark which is considered similar to a physical asset. so when you sell you would use capital gains. But if you strictly buy and sell domains and just park them without building a brand, then the domains are considered inventory and should be accounted the same way on a schedule C. however he also said that being congress hasnt passed legislation with clear guidlines that you could file whichever way you thought it the irs would then have to challenge your filing in court. He then said there isnt much case law yet and thats why there is so much confusion with reporting domain sales
hope this helped, but call and get it right from the horses mouth, because i dont no which irs agent was right although this guy made the most sense |