Domain Sales And Taxes

[Chris.C]

I was just wondering what everyone else categorises undeveloped domain sales for their taxes?

And do you categorise developed sites differently? ie would you call the sale of a website, the sale of working capital and as such is subject to the capital gains discounts?

I'm seeing my accountant this afternoon and I know in the past when I have spoken about website sales and domain sales there hasn't been a lot of precedents set and they get confused as to how to deal with them. So any feedback you guys can offer would be appreciated.

 

[snoopy]

Would imagine a website sale is going to be a capital gains tax event, perhaps unless you are in the business of developing websites to quickly sell off. If the website was build to produce income then I think accountants would treat it as a capital gain.

Undeveloped domain sales - will probably depend on the reason for the registration, if you have a buydomains style business where it is all about selling domains it might be hard to call sales capital gains when that is the businesses main function. If the domains are registered for other purpose like producing income then I think it will be different.I would imagine length of time held and how often domains are being sold and whether the name was bought at a premium is likely to be factors also.

 

[Chris.C]

Thanks for the feedback snoopy.