A domain name is a unique asset class that requires proper understanding and diligent record keeping. Without doing so, you expose yourself to a tax audit, additional work and penalties.
This domain name tax guide is written by a Certified Public Accountant and edited by a former IRS Agent.
Whether you do your taxes yourself or you use a bookkeeper or certified public accountant, you need to understand how to record, classify and file your taxes properly.
Ignorance of the law is not an acceptable excuse. Educate yourself with the most comprehensive guide in the industry.
Written by a Certified Public Accountant and edited by a former IRS Agent,
you will learn all the important topics you need to know, including:
Overview of domain names, income streams and definitions of critical terms and concepts in an easy-to-understand format.
Discussion of entity options with pros and cons, how tax laws affect income, special entity classification rules, and self-employment.
Dealer rules, capital gain, ordinary income, cash vs accrual accounting, depreciation, amortization, charitable contributions.
Record keeping requirements, where to file, federal rules and how to interpret them, required forms.
Basic tax planning strategies, business valuation, sales and taxation.
Spreadsheets, practice tools and exhibits to support the recommendations provided and discussion in the tax guide.
Whether you’re new to domain name investing or you’ve been investing for years, this domain name tax guide will help you fully understand your tax filings. Start doing your taxes correctly…or educate your tax accountant do so.
Written for investors and entrepreneurs located in the United States that have income or expenses related to domain names, whether you’re a flipper or investor – we have your covered.
The United States tax code is about 74,000 pages long and ignorance of the law is not a valid excuse. But we’re here to help individuals and corporations understand tax law as it pertains to domain names.
Tax laws change every year. Are you up-to-date?
The Domain Name Tax Guide is intended for domain name entrepreneurs who are subject to United States income tax laws. It’s important that you understand that this guide addresses only federal taxation. Almost every state, and even some municipalities, also charge income tax, and you may need to check with your tax advisor about this. State income tax laws vary widely – which is why they are beyond the scope of this guide.
To be a successful domain name investor takes creativity, but the skill set to understand and comply with the Internal Revenue Code – the vast compendium of federal income tax laws – is an entirely different attribute. This is especially true an emerging area such as domain name investing.
This book is designed as a reference guide, to help educate novice and intermediate participants in the domain name industry as to how income tax laws affect business entity selection and business practices. The Domain Name Tax Guide will help you understand these laws. It makes references to applicable statutes and uses examples to boil down complex principles to practical advice…
The easiest way to identify and understand operating income is to think of it in terms of how the domain name is being used. Operating income can result from different activities, including:
• The ongoing registration or purchase of domain names and subsequent sales within a 12-month period (“flipping”)
• Lease or rental income from a domain name
• Royalties paid on sales generated from a domain name
• Domain name parking revenue
• Advertising and similar income
The common thread is that the income generally is earned, or received, in the same accounting period as the activity that generates it. (An accounting period, in this instance, is generally one year, because tax returns are filed annually.)…
There is more to starting a business than simply beginning operations. One of the most critical decisions you will make as a business owner is the type of business you establish. For tax purposes, businesses fall broadly into one of four major categories:
• Sole proprietorship
• General partnership
• C corporation
• S corporation
A sole proprietorship is relatively informal, but forming a partnership or a corporation generally requires planning and filing paperwork. Partnerships and corporations are called “entities.”
Selecting an entity may have a significant effect on both taxes and owners’ personal liability. The tax effects can include:
• How your income will be reported
• Which taxes you owe
• Your tax rate(s)
• The tax consequences of cash transfers from business accounts to your personal accounts
Different business entities carry with them different reporting requirements, licensing and documentation needs. Forming and operating an entity can create additional overhead, which may make it inappropriate for a low-activity enterprise. Additionally, the type of entity you select will directly impact how adverse outcomes, such as lawsuits or claims for damages, will affect your personal assets…
Updated and published for tax day: April 18.Purchase
Domain Name Tax Guide covers all the required topics related to domain name taxes.
Overview of Domain Name Streams of Income
Entity Selection and Tax Considerations
Taxation of Income and Entity Impacts on Taxation
Classification of Domain Name Income and Expenses
Tax Filings, Recordkeeping Requirements and Reporting
Tax Planning and Selling Your Business
Reporting Taxable Income and Deductions
Commonly Used Tax Forms, Excel Templates
This Domain Name Tax Guide is intended to be purchased and used by industry newbies and veterans alike. Here’s what a few customers had to say about the information and resources within DNTaxGuide.
"Finally a crutch to lean on. The domain space has always been extremely complicated in terms of accounting and ultimately tax filing. If you ask 10 people you get 10 different answers. The DNTaxGuide lays it all out and explains in detail, very clearly, how to handle your accounting and tax treatment of your domain name business or hobby." -Andrew Rosener
"It won't do your taxes for you, but it will provide all the references and insights to do them correctly. The rest is up to you." -Tom Durby
"I had a chance to read through the guide and can tell you that it really is more than a guide, it’s the Domain Name Tax Bible...So if you haven't done your taxes yet, or if there’s a chance you did them wrong, now is the time to pick up the guide and either read it yourself, or pass it onto your accountant." -Morgan Linton
"I'm writing just to offer my appreciation for your very clear guide to Internet domain name tax issues. It was extremely useful and helpful in preparing my tax returns." -Billy Youdelman
The Domain Name Tax Guide by DomainSherpa is downloadable in PDF format.
DNTaxGuide is ONLY sold as part of a DNAcademy membership.