Tax Deductions For PPC Income...help please

[H2FC]

Please help me to understand this....

I assume I can deduct the registration fees on my tax return for all names I have listed with a PPC company even tho many of them are not earning income.

I also assume I can deduct the yearly renewal fees for all domains listed with PPC companies even if all of them don't receive income.

In other words, if I have just a few domains earning money can I deduct the expenses of the complete list on my return or must I just deduct the expenses of the ones making money?

I think the schedule C form is the correct one to use to report PPC income and expenses on the 1040 return....am I right....is that what everybody uses? I would appreciate any answers you have for these questions....thanks

 

[JohnnJohnn is verified member.]

I am not sure if anyone should give you legal advice.

Check with your CPA.

Good luck!

 

[ck89102]

You ought to get this book. It will answer your questions.

http://www.domaintaxguide.com/

It's been a big help to me & sets the course on exactly what to do.
Good luck.

 

[fatter]

I am not a lawyer or cpa, part of the problem with domains is you can do pretty much anything you want, but then you face a court battle with the IRS, the IRS uses past court cases to set policy, In other words congress has passed nothing on domain names. Having said that I spoke directly with the IRS after getting passed around to 3 or 4 different people the answer i got is if i did a schedule C listing any income from PPC and domain sales, I could deduct all reg fees and expenses from that income. They said some people choose to use sale of domains as capitol gains, or intellectual property sales (like trademarks)which they said was OK if you branded the domain and it was your whole business but that many domainers dont fall into this category and were abusing this and would be taken to court eventually.
As others said go to a CPA but make sure they deal in domains because the average CPA isnt up to par on domains and it still could get you in trouble financially if they screw up


To sum it up the IRS told me look at it like domains are an inventory of widgets that you sell and rent, the store is your whole portfolio of domains
and not a seperate business for every domain. The seperate business for every domain is more like Petshop.com where there was a brand and business built around the domain which made the business and domain one in the same.
You can call the IRS yourself also

 

[Theo]

Schedule C for parking income and renewal fees. Purchases are not treated as expenses. When you sell a domain any cost for its acquisition is subtracted and the net is treated as capital gains if you held the domain for more than 1 year - otherwise it's considered ordinary income (different tax brackets). Consider forming an LLC & use a CPA each year for your taxes.

 

[BobDiGiTaL]

Consider forming an LLC & use a CPA each year for your taxes.

One of the best pieces of advice on this entire forum, but remove the word "consider"

 

[H2FC]

Thanks everybody for your answers. I didn't mean to open a can of worms here but I get some good insight on the problem. Thanks again!