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09-10-2017 05:06 PM - edited 09-10-2017 05:08 PM
Are domain name sales treated as income? Where does this need to be reported? Can I also report the initial price I paid for the domain, and the annual fees I pay for renewing it to get a deductible, and if so, where do I report this information?
09-14-2017 05:44 PM
Welcome to the H&R Block community.
A domain name is considered an investment instrument and it's sale should be reported on Form 8949 and any gain from the sale should be carried to Schedule D. On Form 8949 you'll report what you paid for the domain name when it was registered and then also the total amount you received from the buyer. The difference is taxable gain.
Note that if the domain name was held for more than a year then it is a long-term gain, but if it was held for a year or less then any gain is short-term gain. The difference is that you get a special tax rate on long-term gain.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)