Is selling a domain name taxable?

Discussion in 'Accounting & Tax' started by Ari, 8th Jul, 2020.

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  1. Ari

    Ari New Member

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    Hello,

    Long story short. I bought a domain name back in 2015 for around 12k USD (17k AUD). Now a company wants to buy my domain name for 40K USD. Do i have to pay CGT on this or any other tax i am unaware of? Cheers in advance.

    Ari
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Likely taxable as ordinary income. Also how was the original $12K dealt with ? It should have been a deferred asset. Need to explore the original basis and intentions.
    Perhaps even GST applies. But could be a CGT asset (right) even. If its both the ordinary income prevails.
    Worth seeking advice.

    Reason I say the above is based on USE of a domain. Squatting is generally not economically viable and a objection could be made to strip it and its potentially a CGT right BUT if it relates in any way to your business and is offloaded its income and a taxable supply. In some instances small business CGT concessions could apply but are very hard to meet for just sale of a domain and not more. eg Is it really "active" ?
     
  3. Mark F

    Mark F Well-Known Member

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    Would a domain name be part of intellectual property?
     
  4. Ari

    Ari New Member

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    Thanks mate. The domain was inactive since it was purchased and was parked and never carried any business on it.
     
  5. Ari

    Ari New Member

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    Is it? For me it is, but I don't know...