If you have a good number of domain names you’ve most likely thought about the question of how to account for them at tax time? And, by the way, I’m speaking from a U.S. point of view, where we have very complex (and nonproductive) tax rules.

There are significant decisions to make regarding both the structure of your business (mine is an California LLC for legal protection, and for its simplicity), and of how you treat your names — are they inventory? Are they expenses? Are purchases (above and beyond reg fee) capital expenditures? Amortization? Cap gains or ordinary income?

Crap. It’s enough to make you want to quit the business, if the sheer insanity of the seemingly 24-hour a day name hunting is not for any normal person anyway.

Anyway, it’s likely that your general CPA may not know anything about domain name accounting, so to save a few hundred dollars on him searching for information, I’m going to point you to something that after you read it, you can pass along to your accountant to give them at least a basis of understanding from someone who specializes in this.

Monte Cahn, president of registrar Moniker.com, has a radio program (can’t say I’ve heard it yet, but I’m going to start listening). My CPA found the transcript of one show where he interviewed Evan Brody from Brody & Associates. Evan is Moniker’s corporate tax guy.

I can’t tell you that this interview will answer every question for you on the subject. Hell, when it comes to taxes, I don’t know if one can ever get complete answers. Sometimes, it’s so subjective anyway. But there is a lot of good information. It’s at least enough to get you scared into thinking about how to do it right, I hope.

One of the most interesting things I got out of it is this shocking statistic: “when you’re unincorporated on what they call a Schedule C or Sole Proprietorship, the audit ratio which is really something that is a variable that you really don’t take into consideration for tax planning, but just some statistical information, those entities get audited 11 times more than if you were a corporation.”

Now that’s frightening. I’m assuming since I’m neither a Schedule C or Sole Proprietorship, or a corporation, my LLC falls into or close to the corporation audit rate. I think it just signals to the IRS that the filer is simply more willing ($800 a year in California) to take steps to be serious about their taxes. By the way, I can also tell you that I’ve heard that having your taxes done by a CPA greatly reduces the risk of an audit. I guess individuals are more likely to either lie or make mistakes, than would be a CPA.

So, for your reading enjoyment, here is the Monte Kahn Domains and Taxes transcript.

I would appreciate it if readers would post into the comments any other links to domain business tax discussions they know of! And, please post your own knowledge, or how you do your accounting.

Technorati Tags: domain, domain names, tax, IRS, accounting, corporation, LLC, income

About a month ago, I published an article asking for Overture Keyword Selector Tool Alternatives. I received several sites like really liked. But someone just a few days ago told me about one that I didn’t yet know about. It’s called Keyword Dynamo SecretsToHighProfit.com.

Just pop in your keywords (and the initial captcha for the session) and you’ll get a very nice looking list with the following:

• Related searches that include your term
• Estimated number of times that term was searched on last month (Overture/Yahoo)
• Top Overture/Yahoo Advertiser Bids for each term
• Google Search Results
• KEI, R/S Ratio
• And much more..

In addition, you can export the list! Now that’s what I call service! And it’s all free.

On the page you’ll also see buttons for a Site Analyzer and PR Checker.

Technorati Tags: domain, domain name, overture, keyword, search, keu, page rank, seo, search engine optimization

If you haven’t read it yet, read DNJournal’s article on the State of the Domain Industry. It’s a great article and a critical read for any domain investor.

The introduction of the article:

In our first State of the Industry survey of domain business experts a year ago, our panel predicted a phenomenal year in 2005. Their global forecast for the industry was right on the money as were many of their predictions regarding specific issues and events. Considering their track record we have been chomping at the bit to round up the channel’s best and brightest once again to get their insight into the events and trends of 2005 and more importantly, what they expect for the New Year ahead.

You will hear from a blue ribbon group of 20 experts that include key executives from the leading companies in the registration, PPC, aftermarket sales, drop catching and domain development sectors, as well as leading industry attorneys, trade show organizers and the people whose broad shoulders carry those mentioned above - domain name owners.

Technorati Tags: internet, domain, domain name

Want to see the sales made through Afternic.com for the last few years? Go to this page on ThatSoftwareGuy.com. They’ve somehow pulled together the data for years 2003 through 2006. The HTML pages show the data in date order, but all but the current year can be downloaded in Excel format which you can sort by dollar amount on your computer.

Technorati Tags: internet, domain, domain names, afternic

DomainsBot.com, a very nice domain name brainstorming site I previously wrote about, has some intriguing new applications they’ve put together and placed in their new DomansBotLabs section. They will provide you with considerable statistics and tools to help you better design your name selection criteria. The site is wonderfully designed for your immediate understanding of how to proceed, the data is laid out clearly and the tools are simple to use.

Word Trends
Type in a keyword and you will get a graph showing the domains registered (within the major TLDs ) over time that contain that keyword. You can select additional keywords to include in the graph to view their relative popularity. For example, entering Coke and Pepsi shows two trend lines with similar growth rates, but the number of Coke names registered is nearly twice that of Pepsi.

Domain Stats
This page shows a series of statistical data, graphs, trendlines and conclusions regarding the value of domain names given various aspects of the name. Reports include number of domains sold and values of domains sold by length, number of keywords; and parts of speech. There are 38 figures in all! Really, there is a lot of valuable data here.

Search Cloud
This cool tool provides a dynamic “visual cloud” that suggests new available domain names based on relationships between keywords in existing domain names. It’s difficult to really describe how the results are displayed, so just try it out.

Split-it
As readers of this blog know from reading our wildly popular Hilarious Domain Name Mispronouncings article, there can sometimes be an unintentional double meaning for a domain name if keywords are split in different ways. For a famous example, ExpertsExchange.com also reads ExpertSexChange.com. Use Split-it to avoid these embarrassing and costly mishaps. As you type the word, the Visual Splitter will show you the various possibilities and tell you which is likeliest.

There is also another application called Shadow. It’s not a tool, but a small piece of software that you download on to your computer that will work in a distributed computing fashion to help DomainsBot crunch the massive data in order to better provide more free statistical reporting to you. It works similarly to the Berkeley University’s Seti program, if you are familiar with that. Shadow is not something in which you have to participate to get their reports.

It’s apparent a lot of work went into the DomainsBotLabs project and the quality of their work and the sheer volume of data reflect that. My hat is off to these guys and look forward to see what further tools and information they will bring to us in the future.

internet, domain, domain name