How to declare income from selling a website

[Pokeraddict]

I have gotten conflicting answers from an accountant and a preparer to this and the IRS site is about useless. Also tax software does not seem to cover this except to say copyrights and literary work fall under Schedule D which IMO a website would fall under this.

I sold a website in 2006. It's only asset was it's intellectual property. Nothing but the website was transfered as part of the sale.

One person tells me I can just write it down on a Schedule D just like selling a stock and make the cost basis the cost of the domains involved. Another tells me I have to fill out endless forms to declare the value of each asset sold which would only be the website and domains. Does anyone here have any experience selling a developed website here that can tell me how they filed it?

[Alltimed]

I have an email into my uncle who is a CPA. Hopefully he will give me the answer you seek.

[Pokeraddict]

Thanks, a third opinion says just file it as a schedule D cap gain.

[Sniper]

PA, it would seem that your cost basis should be more than simply the original cost to purchase the domain.

[Pokeraddict]

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PA, it would seem that your cost basis should be more than simply the original cost to purchase the domain.

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It's my understanding from reading that if that is the correct way to file it then my basis would be zero because all of my expenses have been or will be written off on a schedule C. What would make the basis higher?

It seems just like when I tried to find a lawyer to help with the sales agreement there are few professionals that seem to be sure of the laws surrounding websites.

[Big TR]

Your basis is increased by your expenses put into development of the site.

For example you spent $100 for the site initially. You bought software, hired programmers, etc., to the tune of $500 to make the site functional. You basis would be increased to $600.

[Esection]

how about other income?

[Pokeraddict]

[ QUOTE ]
Your basis is increased by your expenses put into development of the site.

For example you spent $100 for the site initially. You bought software, hired programmers, etc., to the tune of $500 to make the site functional. You basis would be increased to $600.

[/ QUOTE ]

Even if I deducted these type of expenses in the past?

[Pokeraddict]

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how about other income?

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Not sure what you mean by that. I've been filing schedule c's the entire site's existance.

[Sniper]

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how about other income?

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There are obvious tax advantages if he can handle the sale as a capital gain, rather than ordinary income.