Established an LLC and want to place my domains under my business name.

[Jpegs2012]

I have several domains whos registrations are about to expire. I want to continue developing these sites with the hopes of selling them or monetizing.
How would I buy and sell my own domains seeing how I am a one-person LLC? I registered domains about 3 months prior to establishing an LLC. I'm confused (and confusing) but I know there has to be someone out there with some help.

 

[Gerry]

Well, it is kind of like putting the cart before the horse...

You can usually get by with making a "private donation" of the domains to the LLC, where they will then be considered assets. Transfer the names over to the names of the LLC to be reflected in the new WHOIS data. Keep in mind, once you make the changes in the WHOIS data, you are going to be locked into transferring out of the registrar. My advice is to change ALL the WHOIS contacts to the in the "hands" of the LLC. It makes no sense to keep your personal information on one of them.

 

[grcorp]

Don't take this as legal advice, or tax advice.

Here's what I'd do, using a third person reference...

- Joe owns 10 domain names
- Joe establishes an LLC to hold assets of his to include domain names - he calls it Joe LLC
- Joe sells these domain names for $1,000 each to Joe LLC
- This money does not actually change hands, Joe just extends the credit for the cost of the names to Joe LLC (for 10 x $1,000, that being $10,000)
- The whois now changes on these names as a result of the sale (if you sold a domain name to Example LLC, the whois would be in the name of Example LLC, right? So why is it any different for Joe LLC?)
- Joe, as the point of contact at Joe LLC should have his name somewhere in the whois, just for a friendlier feel for those who wish to contact the owner of a domain that they're interested in. But this is just in the form of "care of" - not implying that he is the direct owner.

By putting the domains into the LLC, not only does Joe both protect himself from liability in the case of litigation or similar, but he also may benefit from a preferable tax rate, since any earnings go to the LLC, and not him personally.

But where this can really get profitable, is that the $10,000 that Joe LLC now owes to Joe, can, from what I understand, be passed to Joe directly, without having to make excuses of "withdrawls", "dividends", etc.

This is because Joe "loaned" Joe LLC $10,000 by giving Joe LLC $10,000 worth of domains in exchange for no money up front.

Again, do not take this as legal advice or tax advice. But that's how I would illustrate the ideal arrangement in this particular circumstance.

 

[sparty]

You don't gain any benefit from your 10,000 example. You are just passing the taxable gains to yourself before you actually even sell them. Your LLC holds an expense for 10,000 but you personally have a profit of 10,000 that is taxable. (This assumes you paid $0 for your domains of course.) If you take payment in the form of a credit (loan) it is still counted as revenue, how you allocate that is up to you but still taxable regardless of if you receive $0 upfront.

If you try to massage it and take just a 10,000 expense without the personal gain and get auditing you will get slammed for fraud. That is the law in the USA and probably the majority of the world too.

The cleanest way to do it, is would be to sell the assets to your LLC at the cost you acquired them at.

Putting assets is the LLC is simple. You just push them to the company and then in your quarterly or annually filings to the gov you just document the sales.

I am not an accountant but I keep 1 on retainer to talk to whenever I need anything..