Selling Website and Tax Info

Just wondering If you sold a website, how would you go about in paying taxes?

 

just give it all to the government, they take it anyway...

just report it as income, same as anything else.

 

Seems like it would be a long term capital gain, assuming you had taken some time to develop it.

 

The gain or loss would be reported as short or long term capital gain depending on how long you owned the site. Capital gains are taxed at a slightly lower rate than ordinary income.

Over 1 year = long term and a max tax rate of 15% I think. See capital gains are just for the rich dudes.

 

Lets say I owned the site for 3 months and sold for about $5000, how much tax would I have to pay

thanks for all the help.

 

$5,000 less what ever you paid for it, less your expenses, times your marginal tax rate (35% ?)

 

ahh, the paper work for reporting it as a capital gain is too much... hehe What about as an income.

 

The short term capital gains tax rate is the same as your ordinary income tax rate. If you take the time to fill out the proper forms you can still deduct the startup and holding costs for the period of ownership.

You do this on single sheet of paper and hand it to the person who does your taxes. For $30 bucks you can buy one of the tax prep programs and fill them out yourself.

BTW, nice hit on selling the site.

 

Well, one key factor would be to determine where you are because different places have different ways of determining what is taxable and the tax rates.

 

Here is the link from www.TaxForum.us on

1) What type of income is taxable
http://www.taxforum.us/showthread.php?t=42

2) Couple more links on gain/loss on sale of assets
http://www.taxforum.us/showthread.php?t=39
http://www.taxforum.us/showthread.php?t=40

Hope that helps

 

Thank you, that really helped and for all the input.

 

Extremely valid point!

I tend to assume everyone who asks about taxes is from the US and only asking about Federal tax rates. That is my "narrow world view". Here in Kentucky the maximum bite would be 35% Fed and 6% State on the NET gain.

 

Here in Singapore and most of Asia that I know, capital gain is not taxable but I am sure that there are some places like that. I believe we all pay taxes one form or other anywhere in the world with the exception of a few countries or state.

In my case, if buying and selling web sites are part and parcels of my work then any captial gain will be considered as income and thus taxable but if it is something done on an ad hoc basis then it is not taxable.

In the US, taxes can be a complicating thing especially state taxes varies from state to state.

Well, I guess it so happens that the OP is from the US