J. Scott Schiller writes:
> A top Internet executive who previously worked for NSI ... offered a
> strong opinion about the recognition of domain name ownership.
>
> "To me, it's common sense that domains should be classified as real estate,
> virtual real estate," the former NSI executive told WorldNetDaily. "By
> definition, real estate information is a matter of public record. If domains
Keeping in mind that I'm not a lawyer ...
Comparing domains to real estate may be a better comparison than he
realized. While we tend to talk, think, and act in term of "owning"
real estate, what we actually own is the right to use it for certain
purposes. One person may own the right to live on it while someone
else owns the rights to mine it - in fact, few land "owners" own the
mineral rights to their land, and if you don't, you'd better hope
nothing valuable is discovered on "your" land.
The deed that is the public record of your ownership of rights to your
land may be as significant for the restrictions it places on what you
can do with the land as it is for anything else. If you sell your
land, you can place additional restrictions in the new deed (provided,
of course, that the new "owner" is willing to accept the land under
such conditions).
> people
> wouldn't be recognizing domain sales as a capital gain (after X number of
> months) since the practice would be considered illegal by the IRS."
If I sold a domain for any significant amount - and I've been offered
a fair amount for each of two - I would be very careful about treating
the proceeds as capital gains. As I understand it, the IRS and/or tax
courts can rule on the issue in the future and, if the ruling is that
the gain is ordinary income, the IRS can then collect the back taxes,
interest, and penalty for failure to file correctly. Nothing can
protect you from such future tax liability - or, I'll guess, from the
interest liability. However, I'll also guess that some kind of good
faith effort to determine the right filing status can protect you from
liability for the penalties.
There are plenty of precedents that might apply. Almost any sort of
long-term contract can be bought/sold; if the contract is a lease,
buying the lease doesn't buy the leased property. It only buys the
rights specified in the contract. No doubt the IRS has established
rules on how to value leases.
--
Dick St.Peters, [EMAIL PROTECTED]
Gatekeeper, NetHeaven, Saratoga Springs, NY
Saratoga/Albany/Amsterdam/BoltonLanding/Cobleskill/Greenwich/
GlensFalls/LakePlacid/NorthCreek/Plattsburgh/...
Oldest Internet service based in the Adirondack-Albany region
