Hi Reece, from what I understand (with a friend at Revenue Canada).
This is something that is currently not taxed. YET!.
If it's considered your home business, then yes you have to claim the income - but you can also claim the losses, amoungst other things, sometimes this is a benefit that will offset your renewal fees. If you are only doing this, and it's your only source of income then it has to be claimed. If your receiving ANY type of monthly cheque from the gov to supplement your income then yes, it has to be claimed..
Otherwise I don't believe you need to. You can contact the client services line and they can possible be more helpful for you. I guess every situation is different.
If my portfolio was bigger I would do it as a home business to offset the other fees,but currently it's not worth the hassle (I have around 150 domains) and I would be showing a loss for the first year or 2.
Hope this helps, it is how I understand it to be...
Thank you kindly.
It's frustrating that it's so difficult to find information on this issue. You'd think there'd be a simple Yes/No answer from Revenue Canada but nothing seems that easy with the Canadian government.....
Requiring domain name revenue to be claimed would create huge business deductions and an overall loss for CRA. In effect, they would be subsidizing our domain name purchases. Owe 20,000 in taxes this year? Great, buy a $20,000 domain with the taxes due and sit back and collect for the rest of your life. It certainly would make a great pension plan. The CRA won't want anything to do with that...
Yes, I was intending on doing just that if they were taxable..
If you run it under a registered business it is a taxable income. But costs associated such as renewals, website development, promotion etc etc are all deductions against.
Canada Revenue Agency pretty much treats any source of income as just that - income earned. But unlike so many things in Canada, it is pretty hard for them to prove just how much you are making if they do care to pursue you. After all, even .ca's can be registered with *cough cough* not perfect information that can be traced back to you. So many of the companies we deal with are in the US over even overseas so that adds an extra layer for those wishing to keep the taxman at bay...
The only thing I was somewhat worried about was that if I sold a name for say $100,000 in the future when I don't have $100,000 even in my account currently and I've been a client of Royal Bank for nearly 17 years, they may find that odd and perhaps report it to authorities for fear of terrorist links, money laundering etc. Maybe I'm just paranoid, but if I was the accountant I would find a large deposit like that somewhat peculiar...
Canadian banks take notice at the $10,000 level.
I was a security manager at a casino in my former life and it was always amusing to see the money launderers always cashing out for cheques at $9,999 - they don't need to produce id if the payout was less than $10,000. We knew what was going on but the law is easily circumvented. We'd watch them sit down at a high stakes table together - 3-6 of them at a time and buy in for thousands each - play a few hands then take their chips to the cashier and ask for a cheque. They take that to the bank and if anyone asks - they had a great day at the casino - the have the void cheque to prove it.
So if you sell a 100,000 dollar name, go the casino over a few days with some friends and follow the above example! Problem is you need someone to pay for their domain with cash! LOL..
Thanks for the insight whitebark I never thought of something like that but it sure makes sense... Now I probably won't go to that extreme... but if the guy pays in cash..