Depreciation of purchased domain names

for U.S. corporate tax

[dotbiz]

I spent a few grand to buy 3 names last year. NOw I'm doing my corporation tax. Does anyone have experience how to treat these domain names?

I did some search online, there are some articles to suggest to treat domain names as intangible assets, like trademark. Thus the depreciation will take 15 years.

[ogletree]

I would hope the Domains have not depreciated. I am pretty sure I could sell my Domain for more than I bought it for.

[dotbiz]

I would hope the Domains have not depreciated.

I hope so too. But in the mean time, I'd like to save some income tax :)

[bhartzer]

Personally, I've just taken the purchase of domain names as one-time expenses and not depreciated them at all.

If it comes to getting audited, there would be a great debate about the actual value of a domain name. Therefore, I just wrote them off as a business expense (one time) and am not worrying about it any more.

[rogerd]

Interesting thought, dotbiz. I've also immediately expensed my domain purchases, but if one paid a substantial premium it might make sense to treat it as an asset. How to do so is the question... The premium could perhaps be treated as "goodwill", which is fairly common when one purchases a company with a recogized name at a premium to its asset value. Goodwill can be depreciated or written off immediately depending on the situation, but I don't know if goodwill could be used for a straight domain purchase vs. a website purchase (i.e., an ongoing business that included a domain name).

Domains might be similar in some ways to copyrights, trademarks, and other intellectual property, too. I'd ask your accountant. For a modest transaction like the one you describe, you can probably choose your preferred approach without a ton of risk. Due to the inefficient market for domain names, you could probably justify writing them down very quickly.

[Loki99]

Technically you don’t own a domain name, you lease it. There is no depreciation. The only difference in your case is the amount of money you spent in order to acquire the name.

My accountant writes it off 100%. No depreciation.

[dotbiz]

Thank everyone for your answers. I talked to my accountant also. It seems I can just write it off. It's not a big amount anyway.