Will the Tax Bill be Good for US Domain Investors? | DomainInvesting.com
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Will the Tax Bill be Good for US Domain Investors?

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The US Congress is on the verge of passing a major tax bill that looks like it is going to have an impact on just about everyone who lives and/or pays US taxes. I am not an accountant nor do I have any tax expertise, but based on what I have been reading, watching, and observing, it seems like this bill will be good for domain investors who reside in the US and pay taxes here.

There are three reasons why I think the bill could end up being a positive for US-based domain name investors:

  • Tax deduction for pass through entities – It looks like people who generate revenue via pass through entities (such as LLCs) will see the tax rate on this income decreased. Many domain investors I know operate LLCs and the majority of their domain investment income is generated in this manner. Lower taxes on this particular type of income should mean more money in the bank for investments.
  • Lower taxes on corporations could lead to more money for domain acquisitions – It seems like corporations will have lowered tax rates to help spur spending. Some of this spending might come in the form of buying a great business domain name. In addition, the savings that smaller businesses receive because of the pass through rate deduction might lead to additional strategic domain name acquisitions.
  • Higher income individuals will pay less – From what I have observed, this has been a pretty good year for domain investors. This tax bill appears to benefit higher income earners. Many domain investors would likely qualify as high income earners and will presumably benefit from this tax bill.

From what I have read, it seems like the majority of Americans are opposed to the tax bill. From my vantagepoint – and without much tax preparation experience beyond keeping very good records I send to my accountant each year – it does look like US based domain investors could benefit. Of course, there are many more considerations to be made beyond how this bill could help US-taxpayers, but this is just some quick thoughts about the bill as it will impact domain investors and their income.

You are welcome to comment about my thoughts regarding taxes on domain investors operating businesses, but please keep things civil.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (8)

    Sigma

    Great post. I like your theory on lower corporate taxes leading to more domain acquisitions next year. Very plausible, unless the CEO, BOD and other executives take the extra cash reward themselves instead. You should revisit this post next December to compare DN Journal public domain sales from 2017 to 2018. Generally, DotWeekly does a good job of tracking corporate domain name acquisitions. Would be interesting to see the results…

    December 19th, 2017 at 10:19 pm

    Anthony Mitchell

    It would be great to hear about how a domain investor’s corporation type effects their tax exposure and makes a domain-holding corporation more or less survivable.

    LLCs can have tax advantages, but this type of corporation is limited to having at least two owners. If one owner leaves or passes away, then my understanding is that the LLC must be dissolved. Would another type of corporation offer greater survivability options, without significantly raising an owner’s tax liabilities?

    What recommendations might people have on how to set up a domain-holding corporation that can be passed on, intact, to one’s heirs?

    December 20th, 2017 at 1:44 am

    Alexander Ripps

    Great article Elliot. This would be a great topic on my DomainBlawg website….if I could ever find the time to get it up and running.

    December 20th, 2017 at 4:12 pm

    Jason Paden

    I agree 100%.

    I’m not a republican, I didn’t vote for Trump, and frankly I’ve opposed the majority of his agenda.

    But I have to say…@denn tax bill looks . Economically I could not equate a solution to the bubble the nation is in. I thought for sure recession was just around the corner. This bill could potentially stave off that recess.

    December 22nd, 2017 at 12:03 pm

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