It depends on the classification. Generally, the IRS classifies domain names acquired on the secondary market as Section 197 Intangibles, which typically require a 15-year amortization period.

However, if the domain is part of a "software-heavy" digital asset (like a turnkey web platform or SaaS tool), it may qualify for Section 179 expensing. For tax year 2026, the Section 179 deduction limit has increased to $2,560,000.

Under the One Big Beautiful Bill Act, businesses have higher thresholds to accelerate their tax shields:

• Max Deduction: $2,560,000 (up from $2.5M in 2025).

• Phase-out Threshold: $4,090,000. For every dollar spent over this amount on qualifying equipment, the deduction is reduced dollar-for-dollar.

While Section 179 provides an immediate "hit" of depreciation, leasing offers superior Budgetary Agility:

• Off-Balance Sheet: Leases often function as Operating Expenses (OPEX), preserving your debt-to-equity ratios for future M&A or lending.

• Predictable Cash Flow: Instead of a large upfront CAPEX outlay that hits your cash reserves, a lease spreads the cost as a fully deductible monthly expense.

For property placed in service between Jan 1, 2025, and Jan 1, 2026, Bonus Depreciation is limited to 40%. However, Section 179 is often the preferred route for small and mid-sized firms because it allows for a 100% deduction of the purchase price in the first year, up to the $2.56M limit.

Unlike a lease, which is a liability, a purchased domain is a Capitalized Asset. It sits on the balance sheet as Intangible Property. During a merger or acquisition, "Institutional" domains serve as defensive assets and high-authority IP that can significantly inflate the company's valuation.