Sole proprietorship to LLC question

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Submerge

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Well, I've been a sole proprietor for 2 or 3 years now and I'm looking to move into the local market. So forming an LLC would look better in the prospective client's eyes.

But before going and submitting the forms to register an LLC, I'm interested in registering the domain for the business name. I'm fairly confident there is no business of the same name, so what the heck.

How would it work when filing taxes, for the domain? I bought it while still doing business as myself. However, it's a start up cost before launching the business.

Would I file this under the business, or myself? Or am I getting this all tangled up, and filing taxes for the LLC will be simply the same as it has always been. Since I don't have plans of hiring any staff now, but who knows, down the road I could. (If that matters)
 


It doesn't seem like a big deal, domains are like $8. If you're really that worried about it you might as well just pay the tax on it on both it's not like it'll make a difference.
 
You shouldn't even worry about that. Its only $8, LLC is the easiest thing in the world to get.
 
Thanks for the website.

And you guys are right, it is only $8 bucks.

Sometime I just get lost wanting to know facts about things.
 
Your professional fees paid (such as lawyer and accounting fees) that are included in your start up costs should be non-deductable for tax purposes.

Website fees can be capitalized on your books up until completion and launch of the site. Any maintenance after that point should be expensed. Any alterations to graphics I believe can be capitalized, if I am not mistaken.

In Canada anyway.
 
sp111 said:
Your professional fees paid (such as lawyer and accounting fees) that are included in your start up costs should be non-deductable for tax purposes.

In Canada anyway.
Click to expand...

IANAL, or an accountant, however, iirc, in the US startup costs, including lawyer's and accountant's fees, are amortized over a prescribed period - something like ten years.

Any assets contributed to the business are valued, and the value is considered "contributed capital". You don't get to deduct contributed capital, but it's excluded from earnings. That means you can't contribute capital, not make any money, and end up with a business loss. If you liquidate or sell your business, your contributed capital is your cost basis.

Any assets that will break down, wear out, or become outdated can be depreciated (expensed over time) according to a schedule specific to the kind of asset. For instance, computers are five year property (should really be three, but I don't think the IRS has caught up to reality on that yet), while a factory would be amortized over something like 30 years.

The business can purchase assets from its owners (such as a domain you've previously registered in your own name), and that purchase would then be expensed (deducted from earnings) to the same extent as if you had purchased it from a third party. Be careful, however, how you value the asset. If you're dicking around just to reduce your reported income, and sell assets to your company at inflated prices, and you're audited, they'll question those valuations. If you're too outragous you could even be charged with fraud, rather than just accessed additional taxes and possibly a fine.


(I'm :jester: enough to think tax and accounting is fun. Run away... Run away ... save yourself!)
 
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