Calculate the true after-tax cost of a domain acquisition. See how Section 197 amortization creates annual tax shields that reduce your effective cost.
The Domain Tax and Amortization Calculator reveals the true after-tax cost of acquiring a domain name by modeling the tax benefits available under Section 197 of the Internal Revenue Code. Domain names are classified as intangible assets and can be amortized over 15 years, creating annual tax deductions that significantly reduce the effective cost of acquisition.
Many founders and CFOs evaluate domain purchases at face value without considering the tax implications. A $100,000 domain acquisition, for example, generates approximately $6,667 in annual amortization deductions over 15 years. At a 25% effective tax rate, that creates $1,667 in annual tax savings — reducing the true cost of the domain by roughly 25% over the amortization period. This calculator models your specific scenario including acquisition price, tax rate, and discount rate.
The output includes a complete 15-year amortization schedule, annual and cumulative tax shield calculations, the NPV of total tax benefits, and the effective after-tax cost of the acquisition. This analysis is essential for any CFO evaluating a domain purchase as a capital investment and is often the missing piece in board-level domain acquisition proposals. The results pair well with the Board Slide Generator for creating a comprehensive financial case.
Section 197 of the Internal Revenue Code allows businesses to amortize certain intangible assets, including domain names, over a 15-year period. This creates annual tax deductions that reduce your taxable income and lower the effective cost of the acquisition.
Section 197 amortization generally applies when a domain is acquired as part of a business asset purchase. Consult your tax advisor for your specific situation, as rules vary based on how the acquisition is structured and your entity type.
Yes, the Domain Tax and Amortization Calculator is completely free. All calculations run in your browser.
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