Tax Issues

[stueynet]

Hi all. Im sorry if this is already being discussed somewhere but I did not see it yet so I will start this thread.

How do people account for the buying and sellig of domains? I see it as having 3 possibilities:

1) Domain name is an asset that you buy and then dispose of - for a capital gain (or loss)
2) A domain name is a marketing expense of owning a website which at some point you may build and then dispose of
3) A domain name is part of the cost of building a website and if one is a web developer, then it would be considered a Cost of Goods Sold item and thus an expense also.

Does anyone have any experience in this? Also a Canadian perspective would be helpful since I'm a Canuck.

Thanks all!

 

[fatter]

I dont no about canada, but 2 years ago in USA I stopped by the irs office and they told me congress was working on a bill at that time, I dont no if it is resolved but I would hope it is like stocks if you hold them more than a yr you just pay a capitol gains tax, and not close to 50 percent depending on your tax bracket

 

[dtobias]

I'm not a lawyer or an accountant, but I suppose it can be any of those, depending on how you use it. For somebody for whom domains aren't a primary business, but merely a means to another end (e.g., Web site development, or maybe even further-removed if the Web sites themselves are merely a tool used to pursue a non-Web-related business), it's most logical to regard any costs involved in obtaining or renewing domains as being part of the expense of maintaining the site, and if, eventually, they choose to sell the domain, their income from that would be a windfall profit. On the other hand, somebody in the main business of buying and selling domains might treat them as assets with a cost basis based on what was spent on them.

 

[fatter]

The USA wants to no how much income you have from side endevours even if you sell sheep sh*t on the side.I wish we would just go to a national sales tax, I hate tax time