You Should Keep In Mind The Huge Tax Hikes Coming Next Year When Deciding Whether To Sell Domains

If you make $200K or more there is a huge tax hike coming for next year if you are in the United States.

In the domain business it can only tax one domain name sale to put you over the top into the “rich people” tax bracket.

Its pretty hard to keep politics out of any discussion about taxes but we are going to try to stick to the facts

If your pondering a big sale there are some tax implications you should be aware of:

Starting in 2013, families whose overall income is above $250,000 (individuals with income over $200,000) will pay an additional tax of 3.8% on taxable investment income (e.g., interest, dividends, capital gains, rents, royalties) to pay for the health care reform and the Bush tax breaks also expire.

So with the combination for 2013, the The top tax rate on ordinary income will rise from 35% to 43.4%.

The top tax rate on capital gains will rise from 15% to 23.8%

The top tax rate on dividends will rise from 15% to 43.4%

All and all its a very substantial tax increase percentage wise from 33% to 300%.

Take note that these tax rates will go into effect unless Congress passes a bill to lower the tax rates and the President signs the bill, which is extremely unlikely to happen, so to be clear if there is inaction these new tax rates go into effect on January 1, 2013.

Also you should note that President Obama has is on record wanting to increase the capital gains rates to 30% on those making $1M or more so the tax increases that go into effect in 2013 may go even higher for some.

You should understand that for many domainer the same dollar sale this year is going to be taxed at a much lower rate than if the domain sells next year.

comScore: Record Week In Online US Holiday Shopping History

comScore.com reported today, for the holiday season-to-date, nearly $32 billion has been spent online, a 15% over last year.

For the week ending Dec. 18, four days surpassing $1 billion in sales, making for  an all-time record of $6.3 billion in online retail spending for a week, up 14% from tthe same week last year.

The final shopping weekend before Christmas reached $1.04 billion to rank as the second heaviest weekend of online spending on record.

2011 Holiday Season To Date vs. Corresponding Days* in 2010

Non-Travel (Retail) Spending

Excludes Auctions and Large Corporate Purchases

Total U.S. – Home & Work Locations

Source: comScore, Inc.

 

 

Millions ($)
2010 2011 Percent Change
November 1 – December 18 $27,814 $31,973 15%
Thanksgiving Day (Nov. 24) $407 $479 18%
Black Friday (Nov. 25) $648 $816 26%
Thanksgiving Weekend (Nov. 26-27) $886 $1,031 16%
Cyber Monday (Nov. 28) $1,028 $1,251 22%
Green Monday (Dec. 12) $954 $1,133 19%
Free Shipping Day (Dec. 16) $942 $1,072 14%
Week Ending Dec. 18 $5,499 $6,286 14%

*Corresponding days based on corresponding shopping days (November 2 thru December 19, 2010)

“The final big week of online holiday shopping remained strong throughout, with four days surpassing $1 billion in sales and the second heaviest online shopping weekend on record,” said comScore chairman Gian Fulgoni. “With only a few more days until Christmas, the preponderance of Americans’ late season holiday shopping will shift to brick-and-mortar retail, although the procrastinators among us will still be able to take advantage of expedited shipping and buy online up to and including the day before Christmas Eve with the guarantee of having their gifts delivered in time for the holiday.

“In total, we will see another $5 or $6 billion in e-commerce spending over the remainder of December to finish off what has clearly been an outstanding season for online retailers.”

Ten Online Spending Days Top $1 Billion this Holiday Season

“For the 2011 holiday season-to-date, ten individual days have surpassed $1 billion in online retail sales. Cyber Monday (Nov. 28) currently ranks as the heaviest online spending day of the season – and in history – at $1.251 billion. Monday, December 5 ranks second at $1.178 billion, followed by Green Monday (Dec. 12) in third with $1.133 billion. Free Shipping Day (Friday, Dec. 16) ranks sixth at $1.072 billion.”

Billion Dollar Spending Days for 2011 Holiday Season

Non-Travel (Retail) Spending

Excludes Auctions and Large Corporate Purchases

Total U.S. – Home & Work Locations

Source: comScore, Inc.

Rank Date Spending in Millions ($)
1 Monday, Nov. 28 (Cyber Monday) $1,251
2 Monday, Dec. 5 $1,178
3 Monday, Dec. 12 (Green Monday) $1,133
4 Tuesday, Nov. 29 $1,116
5 Tuesday, Dec. 6 $1,107
6 Friday, Dec. 16 (Free Shipping Day) $1,072
7 Tuesday, Dec. 13 $1,064
8 Wednesday, Nov. 30 $1,025
9 Thursday, Dec. 8 $1,024
10 Thursday, Dec. 15 $1,018


Online Shopping Is Up Big This Shopping Season According to comScore, IBM & Buy.com

Three reports out today indicate that online shopping is up big so far this holiday season.

comScore (NASDAQ : SCOR), reported that holiday sales season-to-date, are $9.7 billion 14% increase versus the corresponding days last year which was $8.4 Billion in sales during the same time frame.

“The official comScore 2011 holiday season forecast is that online retail spending for the November – December period will reach $37.6 billion, representing a 15%t gain versus year ago. ”

“This strong growth rate represents an improvement compared to last season’s 12% increase.”

“Due to the strength leading up to and during the holiday season-to-date, comScore’s statistical models are forecasting that U.S. retail e-commerce spending will grow at a rate of 15 percent versus last year,” added Fulgoni. “These projected growth rates reflect the significant channel shift we’re witnessing from offline retail as an increasing number of consumers rely on the online channel for initial browsing, price comparisons and completing transactions. With this continued momentum, comScore anticipates nearly $38 billion in online consumer spending during the November and December time period.”

Yesterday IBM also released figures on online shopping.

According to IBM, “U.S. shoppers took advantage of early sales this holiday driving a 39.3% increase in online Thanksgiving day spending while setting the stage for 24.3% online growth on Black Friday compared to the same period last year.

Some more findings from IBM:

“Mobile traffic increased to 14.3 percent on Black Friday 2011 compared to 5.6 percent in 2010.”

“Sales on mobile devices surged to 9.8 percent from 3.2 percent year over year”

IBM Coremetrics  tracks more than a million transactions a day, analyzing terabytes of raw data from 500 retailers nationwide. ”

Buy.com says its sales were up double digits as well.

“Buy.com today reported sales over the last two days grew by double digits year-over-year (as of 8 p.m. PST on Friday, Nov. 25).

 

Federal Reserve Bank of San Francisco: “Odds Are Greater Than 50% Chance Of A Recession In Early in 2012″

Well if your a believer in the recession is over and the economy if on the way to recovery, the Federal Reserve Bank of San Francisco in a post disagrees saying that the “Odds Are Greater Than 50% Chance Of A Recession In Early in 2012″

In its Economic Letter the two co-authors, one Travis J. Berge is an economist in the Research Department of the Federal Reserve Bank of Kansas City the other Early Elias is a research associate in the Economic Research Department of the Federal Reserve Bank of San Francisco.

There paper cites problems oversees as the major issue for another recession and while you should really go and check out the report here are some highlights.

“Since the summer of 2010, the situation on the ground has changed. ”

“Japan’s March 2011 earthquake and tsunami disrupted supply chains in the U.S. automobile industry far more than expected. ”

“Meanwhile, the deteriorating fiscal realities in Europe have been keeping many a trader awake at night, reliving the nightmare of the near-collapse of financial markets in the wake of the Lehman Brothers bankruptcy. The European situation was highlighted by the September 2011 release of the euro zone purchasing managers index data, which indicated that the manufacturing and services sectors contracted in August. Christine Lagarde, the IMF’s managing director, sounded the financial alarm by suggesting that European banks are in “urgent need of capital” in a speech on August 27 at the Federal Reserve’s Jackson Hole Economic Policy Symposium.”

“This Economic Letter revises the recession odds calculated in 2010 to account for these international factors.”

“Viewed through the domestic lens, the immediate risks of recession appear to be low, but gradually increasing. International risks, though less precisely measured, are the mirror image.”

“Risks are highest in the very short run, but then fade. In combination, the data suggest vigilance. ”

“The U.S. economy is fragile with limited ability to withstand shocks. Yet, as the economy strengthens, recession risks will gradually abate beginning in the second half of 2012.

“”In the next few months, the odds of recession due to domestic factors appear reasonably contained. Those odds increase gradually and reach about 30% in the second half of 2012, after which they decline. However, the curve reflecting the international odds suggests more imminent danger to the economy, although this threat is harder to calibrate using historical data and only indirectly reflects the health of the European financial system. Recession odds based on international factors peak at about 45% toward the end of 2011, but decline rapidly thereafter.”

Figure 2
Recession probability forecasts

Recession probability forecasts

“The combination of these two recession coins, shown in the combined risks line of Figure 2, is quite disconcerting. ”

“It indicates that the odds are greater than 50% that we will experience a recession sometime early in 2012.”

“Prudence suggests that the fragile state of the U.S. economy would not easily withstand turbulence coming across the Atlantic. A European sovereign debt default may well sink the United States back into recession. However, if we navigate the storm through the second half of 2012, it appears that danger will recede rapidly in 2013.”

Travis J. Berge is an economist in the Research Department of the Federal Reserve Bank of Kansas City.

Early Elias is a research associate in the Economic Research Department of the Federal Reserve Bank of San Francisco.

Gold Vs. Google 2 Years Later To The Day: One Is Up Over 70% the Other Only 4%

September 23rd 2009 Google hit $500 a share and Gold hit $1,00 an ounce and we asked the question:

“What you think is a better investment right now, Google at $500 a share or Gold at $1,000 an ounce.”

We put up a poll for a week and the results were split right down the middle, 50% picking Google, 50% picking Gold.

So we sit exactly two years later.

Google is trading at $520 a share up 4% over 2 years.

$10,000 invested in Google two years ago would be worth just $10,400.

Over the last 52 weeks Google has traded as low as $473 and as high as $643

Gold on the other hand closed at $1,755 up 75% from two years ago

$10,000 invested in Gold would be worth $17,555 2 years later.

Over the last 52 weeks Gold has been as low as $1,314 and as high as $1,907

So the worst you could have done at any point in the last year with gold is selling it for over 30% higher than two years ago, while Google you could have actually lost money with if you sold at the low of $473.

We will see where we are at next year.