If not what taxes would you pay and if you sell the domain next year (2008) are you exempt from CGT under the rule that if you fall into the 10% to !5% tax bracket you pay no CGT in 2008. This would be in the United States.
Obviously we would make a profit from the sale of the domain name.
Yes it would be taxable income.
If the CGT year 2008 holds, then you’d be exempt from paying any tax. But don’t count on it not being changed. But it’s so close to 2008 now, you might as well wait until January to finish the deal – you don’t have anything to lose as long as the customer will wait a couple weeks, and with a little luck you could end up being free from paying tax on the gain. I don’t know how much money you’re talking for a gain, but that amount will figure in to determining if you are in the 15% bracket or lower.
Are you considering buying another domain name? If so, look into performing a 1031 tax deferred exchange.
Yes, you would pay capital gains tax upon a sale.
I recommend http://www.irs.gov or visiting your local irs office for help. You should be able to complete sched d, capital gains and losses yourself.
It’s an asset, so yes, any gain is capital gain.
Yes, it’s possible that if your taxable income is small enough, some of the gain will be taxed at 0% in 2008.