Treatment of web domain ownership & reselling for tax purposes: Capital asset, or not?
Is a domain name an asset or expense?
The domain name is an integral intangible asset. ©
A communication tool allowing to establish its identity on the Internet and gain a digital territory; A legal element through a temporary contract with an Internet Registry; A financial asset, accountable as an intangible asset under certain conditions.
Do you capitalize the purchase of a domain name?
Domain names, regardless of classification as generic or nongeneric, must be capitalized under Sec.
What type of expense is a domain?
Domain names are generally regarded as intangible personal property. The nominal annual domain name registration fees are generally deductible.
How do you claim ownership of a domain name?
Transfer a domain name to another person
- Disable WHOIS/domain privacy. …
- Ensure admin email is up-to-date. …
- Unlock the domain. …
- Get the transfer authorization code. …
- Request a domain transfer. …
- Approve transfer request email. …
- Contact Hover. …
- Obtain a one-time PIN.
How do you classify a domain name in accounting?
Accounting for Capital Expenditure
Under generally accepted accounting standards, businesses must depreciate fixed assets and amortize intangible assets. Because a domain name is not a physical asset, it never needs to be depreciated. However, certain domain names are considered intangible assets.
Is buying a domain a business expense?
The cost of purchasing an Internet domain name is not a currently deductible business expense but instead is generally capitalizable under Code Sec. 263 and amortizable under Code Sec. 197.
Are domain names tangible or intangible assets?
intangible asset
An intangible asset is an asset that is not physical in nature. Examples include non-compete agreements, customer lists, goodwill, and corporate intellectual property such as patents, trademarks, copyrights, trade secrets and domain names.
How long do you amortize a domain name?
Acquired Domain Name Costs Are Amortized Over 15 Year Life Per Chief Counsel Advice. The IRS National Office determined that the proper life for amortization of an acquired domain name is 15 years in Chief Counsel Advice 201543014.
Is a domain name a 197 intangible?
Generic domain name.
197. However, it is a customer-based intangible under Code Sec. 197 if it is associated with a website that is already constructed and maintained by the acquiring taxpayer for use in its trade or business, to generate advertising revenue or increase market share.
Who is the legal owner of a domain name?
registrant
The legal owner of a domain name is the person and/or organization listed as the domain’s registrant or owner contact. Domains typically have four contacts: registrant/owner, admin, technical, and billing. These can be the same person or different people.
Who is in charge of domain name?
The Internet Corporation for Assigned Names and Numbers (ICANN) is the non-profit organization that oversees the assignment of both IP addresses and domain names.
Are domain names copyright protected?
Is a web address (a domain name) subject to copyright law? No, for a variety of reasons web addresses (also known as a domain names or URLs) aren’t protected by copyright. Even though copyright doesn’t protect domain names, that doesn’t mean domain names are entirely unprotected. Trademark law protects web addresses.
Is a Web domain intellectual property?
Domain names are not protected as such by an intellectual property right. However, the name that makes up the domain name may itself be protected by copyright, trademark right, geographical name or consist of a surname, a trade name or a corporate name.
Can you trademark a website domain?
A domain name cannot be protected as a trademark merely because it is your address on the Internet. In addition to using the name in commerce, it must be used in a way that distinguishes your goods or services from those of others.
Is a domain name considered a trademark?
A mark comprised of a domain name may be registered as a trademark or service mark in the U.S. Patent and Trademark Office. However, just like any other mark, the domain name is registrable only if it functions to identify the particular source of goods or services offered.
Does registration of a domain name give you trademark rights?
Trademarks are federally registered through the USPTO; domain names are registered through a domain name registrar. They are not the same thing. One identifies the source of goods and services; the other is a web address. Registration of a domain name with a domain name registrar does not give you trademark rights.
What’s the difference between a domain name and a trademark?
A domain name is registered so that there is an internet address. A trademark is registered to identify a product or service. A business name is registered to identify a business that wishes to trade other than with its own name. A company name is the name of a specific type of legal entity.
Do I need trademark for my website?
Domain name trademarks protect against infringements on your domain name. Trademarks are essential for online businesses. They should be used for branded domain names.
What happens if someone trademark my domain name?
If you trademark your domain name, you have legal protection if someone uses your trademarked name. You can sue the other company and recover financial losses you might have incurred.