For Sale When to register as a business?

[Spex]

Hey there,

I haven't done this yet because a) I've only sold 3 domains ever and nothing for over $6 each and b) I haven't really been very active in the buying and flipping; so even though making money was one reason I got into this world, I haven't been giving it my all. I do have some good names (every says that right?), so I will hopefully be making some nice sales once I put some time into developing and marketing my better names.

Anyway, I was wondering when I should consider registering as a business. I know that based on the relatively low cost of doing so, I should have registered from day 1, but I didn't want to have to deal with the paperwork and tax and stuff for my business that makes $0 per year.

So does anyone have any advice on this? Are you all registered (don't feel like you have to answer this)? Is it worth it? How much of a pain in the but is this at year end? Are Canadian business law, Rev Can and accountants clear on the domain name industry, or is this business more of a trial and error process when it comes time to declaring income and
deductions?

Thanks

 

[Sonny Banks]

I don't know in USA/Canada but in Italy when you earn 1.5k/month you can start your serious business.

Depends on the laws/taxes also.

 

[fatter]

I just file schedule C in my name at the end of the year as a sole propeiter (doing business in my Name and SS number)then deduct my reg fees and added expenses, I dont beleive you must get a business license unless you want to establish a name for your business. Most tax accountants dont know anything about filining for domainers, some domainers do a LLC to save money on taxes and lower the liability if sued..
I contacted the IRS because I heard from domainers if you held the domain for a full year you could just claim capitol gains like when you sell a stock. What i was told by IRS was if you buy and sell domains they are treated as inventory and you have to treat them like buying and selling shoes. The exception is if you built a brand around your name and selling it would be like selling a license/trademark. Although the agent was clear there is still no established policy because until the IRS takes people to court and establishes precedent it is still a gray area. As always dont take my advice but try and find an accountant that knows domains
Joe T

 

[INFORG]

Every domainer should start a "business". The schedule C tax incentives are good. It may not be necessary, but it provides some legitimacy to register in your state at least as a sole proprietorship. Check your state gov site for details.

I used TurboTax to do my filing and it walked me through it pretty well. If you reach a point where your revenue justifies it, you would want an accountant.