Wow! Lot to discuss here. But I'm a little confused where depreciation comes into it. Up to now I have filed a Schedule C for this activity. I've managed these domains as *inventory*, not as assets, as they were always intended for resale. However, if that's the case, I think there's no consideration of depreciation *or* capital gain, right? I would just be paying income tax on the sales price and deducting cost of goods sold in the standard way for inventory (i.e., how I've done it until now).
Conversely, if I consider these investments, not business assets or inventory, is there any depreciation to worry about? I thought the only consideration in that case would be figuring out the cost basis (i.e., whether or not I can recapture some of the registration costs).
