For Sale Questions re: business and taxes (Canada)

[Spex]

Hey there, I'm fairly new to the domain game and have registered about a dozen domains in the last month or so (some crappy, some good).

Since being parked, they've generated about $0.25 total, so I'm not making any money yet. And since it's too early to sell and transfer, I won't be making any money for a while, if ever.

So my questions are…

Since this is a hobby, should I register as a business? If yes, will the fact that my domains were registered prior to my business being registered cause any problems? If not, at what point should I think about registering?

Also, what is my responsibility towards sales/income tax should I ever sell these domains or start making decent money on parking? (and would my .ca's be treated differently than my .com's, net's, org's?)

I don't expect any long drawn out responses from anyone (I won't mind them either), but if you could suggest some good sites to read up on this issue, I would be very appreciative.

Thanks.

 

[LTroiani]

I know this isn't directly answering your question, but if you run your business under your exact name, and the business meets a few other easy to meet criteria, there is no need to register it. This is at least true in Ontario, I'm not sure about other provinces.

Here is a link. You can fill out all the information and it will tell you that there is no need to register. Make sure you select sole proprietorship.

https://www.ibsa.serviceontario.ca/...ervlet?command=screenflownoscript&screenid=26

Im also looking forward to seeing specific answers to you questions.

Luc

 

[onlinestoreca]

If it was me... and it's not...

I wouldn't bother registering a business for a dozen names. If you sell them, I would claim them as a capital gain, of which I believe 50% is tax free.

I have never made enough money on PPC to come even close to covering my expenses for domain names. So I don't think you have any worries of paying taxes on income. Others can correct me if I'm wrong, then tell me how.

You only have to charge GST/HST if you make over a certain amount in sales. I believe it's something like $20,000/year. So, unless you have some really great names, you should be okay. If the market does get ridiculously high in a few years (I wish!), you could then read up on the business registration and collecting GST/HST, or stagger your sales.

Good luck and be careful it's addictive. I own 750 names for my future store and somehow wound up with an additional 1250 as an investment -lol. I promised myself not to buy anymore, except for that one from Namefox yesterday, oh and there is another one in the TBR...

 

[DropWizard.com]

It's totally unnecessary. You can just account for revenue and expenses in your normal tax return. And you can earn up to 30k without having to deal with collecting gst etc.

If at some time in the future you incorporate an accountant can do a vend in of assets into the corporation for you without triggering tax consequences.

However I would talk to an accountant now and get a good feel for making sure your home office expense claims are well founded. There are some areas there that most people are ignorant of. As well as car expenses (honestly I had to drive to get that domain :undecided: )