I sold a domain name in early 2000. I received money and got a 1099 MISC with the check. Would this not be concidered a capital gain rather than income?

 

If you got the 1099-MISC then it is miscellaneous income but not capital gain. Did you get to file your tax in time or get an extension?

 

The 1099 was filed in error, IMHO. A 1099 is for services rendered, I assume you rendered no services, but sold an intangible asset. Now if you are in the business of buying and selling domain names, I would say you have ordinary income. But, if it was an investment, then I would treat it as capital gain. Here's what I would do:

1) Report the income you received on a schedule C - gross income.

2) Take a deduction on schedule C for the same amount - schedule C now zeros out.

3) Report the sale on Schedule D as a capital asset.


The other option is to get the preparer of the 1099 to fix it, but good luck on that!

 

It may be different in Oz but I sold a domain name last year for a 5 figure sum and it was taxed as capital gains.

 

Thanks, I'm pretty sure it's a capital gain and not income. I argued with them about it but they did it anyway. Bastards! I'll try to get an accountant to straighten it out.

 

 

You can actually consider a domain name intangable capital?
Personally, I would consider it services rendered, which falls under schedule C territory. You are registering the domain name for him. (even thought you didn't know about it when you registered it

 

I would think it is the name itself he sold vs. the act of registration. If I owned the name http://www.s2000.com and you wanted it I could sell you the name vs. just registering a new name such as http://www.s2001.com. It's definitely an asset sale vs. services, IMHcpaO.

 

I guess the question is whether a domain name can be "owned".

 

I would say if it's something you can sell, then it must be something that is owned - yes, it's an intangible asset, but an asset, much like a copywrite, a patent, etc. You pay to register it and you have the right to use the domain name, no one else can. I would say that's a form of ownership.