Be Prepared for Tax Time | DomainInvesting.com
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Be Prepared for Tax Time

4

It’s only February 12, but I am already thinking about tax time in just a couple of months.  I am not a finance or numbers guy, so I use an accountant to file my taxes, although I keep very good records of sales, expenses and other transactions.

One thing that made my life easier a couple of years ago was Sandy Brooks’ Domain Tax Guide. When I first explained to my accountant what I did as a hobby, he understood it, but I don’t think he knew anything about it.  At the time, I had made about $1,000 in profit, so it really didn’t matter at all.

As my income continued to rise, the tax impact did as well.  A couple of years ago, when domain revenue became a significant income stream for me, I sent him a copy of the Domain Tax Guide and asked him to read it and use it as a reference when doing my taxes.  If you are making a few thousand dollars or more, you should know the advantages and disadvantages of doing things certain ways.

A few things I think are important that are discussed in the Domain Tax Guide include:

  • Benefits of forming a LLC or other legal entity
  • When to consider domain sales inventory revenue
  • Whether domain names are assets
  • Depreciating domain name assets
  • How capital gains taxes work with domain names

There is a lot of value in the Domain Tax Guide, and although these are affiliate links, I strongly recommend using the tax guide as a reference – whether you file your own taxes or you have an accountant filing them for you. I’ve definitely saved a lot more money than this e-book cost.


About The Author: Elliot Silver is an Internet entrepreneur and professional domain investor. Elliot is President of Top Notch Domains, LLC, a domain investing company that has sold seven figures worth of domain names in the last five years. Elliot is the publisher of DomainInvesting.com.

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Comments (4)

    Payam

    This is FUNNY, I was just getting ready to write you an email and ask for your advice in regards to domaining and Taxes. I will be sure to order the book..I have several questions that I hope the book will be able to help me with.

    February 12th, 2009 at 10:35 pm

    deepak

    I didnt know this is nearing tax season in US ( it surely is in India), but i regged taxFever(dot)com only last week. I guess i have to concentrate on building content on it. I bought this name cos it gives me a fever whenever the tax season comes…

    :-)

    February 13th, 2009 at 3:34 am

    jp

    1 word, extension

    February 13th, 2009 at 11:31 pm

    Stephen Douglas

    I’ve been using Sandra Brooks for my tax accountant for over 20 years, and with her husband/secretive domainer Darryl Brooks, she knows the tax situation with domainers better than anyone in our business. If you haven’t bought her Domain Tax Guide at domaintaxguide.com, then you aren’t a true “domainer”. If you want to know how to apply your investments in domains to your taxes each year, the Domain Tax Guide is A MUST ebook to own. Give it to your tax accountant before April.

    I fully support Elliot’s report on using Sandra’s ebook – it is a LIFE SAVER for domainers. I made the mistake of using my wife’s accountant one year, and I won’t give details, but she made some mistakes, and Sandy caught them, saving me over $10,000. That’s serious jing! She has been my hero more than once..

    Thanks Elliot, for doing a writeup on my friend Sandy’s excellent and required ebook. All you new domainers, spend the money and buy the ebook, give it to your accountant to help them understand the dynamics of domain investing.

    February 15th, 2009 at 4:31 am

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