How are domain sales treated on federal income tax?
- Thread starter Quakebum
- Start date
CG. That's why it's best to be incorporated for this sort of thing.
Consider doing the transaction in virtual currencies and liquidating over time?
Consider doing the transaction in virtual currencies and liquidating over time?
Well, with a sale of $x,xxx the IRS won't give a fuck how you declare it. But for a larger amount, there isn't an accountant out there who would guarantee that the IRS won't ass-rape you 2-3 years later by refusing to agree that it was capital gains.
If you do declare it as capital gains, then make sure that for the next three years you maintain enough cash to cover the difference in tax rate + penalties. Don't spend it, but use a low-risk low-return high-liquidity investment for roughly 40% of the money you made.
If you fly under the radar while declaring it capital gains, good for you. If not, you'll be able to pay the government off and maybe even make some money in the process.
If you do declare it as capital gains, then make sure that for the next three years you maintain enough cash to cover the difference in tax rate + penalties. Don't spend it, but use a low-risk low-return high-liquidity investment for roughly 40% of the money you made.
If you fly under the radar while declaring it capital gains, good for you. If not, you'll be able to pay the government off and maybe even make some money in the process.