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- Apr 11, 2005
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in 2008 I purchased a batch of domains for $5000. Within a couple of weeks I turned around and sold one of the names for $2500 to a company, and at the end of the year that company sent me a 10-99 Form reporting their payment of the money.
Because I purchased the name myself, I felt I hadn't netted $2500 from the transaction, so I didn't pay taxes on the funds. I just got a bill from the IRS saying that I owe them $400 as taxes for the income.
How does this work? can I subtract the expense of my cost for the name? Should I send them proof that I paid $5000 for the domain along with a few others, and explain that I didn't actually profit that amount? Or, should I just pay the $400 and forget about it....
Has anyone else received a 10-99 for a domain sale?
Because I purchased the name myself, I felt I hadn't netted $2500 from the transaction, so I didn't pay taxes on the funds. I just got a bill from the IRS saying that I owe them $400 as taxes for the income.
How does this work? can I subtract the expense of my cost for the name? Should I send them proof that I paid $5000 for the domain along with a few others, and explain that I didn't actually profit that amount? Or, should I just pay the $400 and forget about it....
Has anyone else received a 10-99 for a domain sale?