Ouch. IRS says some Domain Purchases not Deductible
Can you deduct the $10,000 as a business expense?
Maybe not - story here.
The IRS is saying since a domain is an intangible asset it requires amortization of the cost over 15 years.
What's the impact?
If you're in the 25% tax bracket a $10,000 deduction immediately saves you $2500 in taxes. If you amortize over 15 years that is a $667 yearly deduction and only $167 per year in tax savings.
There is a de minimis rule so this issue should not apply to domain purchases of $5000 or less.
Bottom line: don't be casually making big domain purchases without considering the tax implications in your business plan.
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JohnMcCabe -
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BradVert2013 -
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Frank Donovan -
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