Several years ago, John Martin purchased a group of internet domain names at a cost of $1,000 each, hoping at some point that he could sell one or more at a later date. Until this year, none of the names have been sold. However, during this year, two of the names were sold for $25,000 each. Should the resulting gains be treated as capital gains or as business income? Justify your conclusion.

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The Answer of Several years ago, John Martin purchased a group of internet domain names at a cost of $1,000 each, hoping at some point that he could sell one or more at a later date. Until this year, none of the names have been sold. However, during this year, two of the names were sold for $25,000 each. Should the resulting gains be treated as capital gains or as business income? Justify your conclusion.

Several Years Ago, John Martin Purchased a Group of Internet