02 Taxes, Assets & Website Worth
 

Ok trying to do taxes here oh what fun. I need to list new sites we bought as assets and was wondering how do you come up with a value of a website, domain, members, design etc. I know there is companies that can tell me what a domain is worth and usually it is some ridiculous amount, would I use that? Would I add in recurring members? How do you come up with a total asset net worth for a website? Anyone done this?

Thanks,
Mark

Any tax advisors anywhere, come on webmasters.

Mark

well, according to Ebay, 4 word domains are worth AT LEAST 40K

I would talk to an accountant, you need to do some long term thinking on just how you handle this valuation

Kimmykim,

I did speak to an accountant but they really couldn't help me when coming up with a price each domain would be worth. They said just take the wholesale amount or fair market value. I know I can get an appraisal for domains but do you think that would that be enough if I got audited?

Mark

$8.95... that's what I paid for it.... =) I think I can write that off over 7 years too!

dude less the assests the lesser the Tax,

shit man haven't you learned anything?

according to my accountant i lost money my last 2 years in business

Domain itself should be valued at historic cost, eg. the price you paid for it. The say it's like a building, how can you ever get an accurate "fair market value" for the cost of the building every year? If you never sold it that means you never realized gain therefore you can't recognize it. As far is the current worth of the domain name and the popularity of your site, there is no such thing as internally created goodwill so you can't include that either unless you, again, realized gain. Recurring members is just regular income.

Its normally the cost to build the site, price you paid for domain
and three times the revenue you bring in Monthly from your members

hmm interesting

That's how much you would 'value your site' if you were to sell it to another party, not report to the IRS. Cost to build is an expense, domain name is an asset since it brings with it future benefits so it should be valued at historic cost, and recurring members are a part of regular income.

atleast in the adult realm

If its a one word domain like teen or Erotica it depends on type-in traffic etc.

I guess my question is based on that equation would someone acquiring the business or site pay less or more than that.

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