2nd Website- Second Business?

[Beth]

My client owns an online website where she sells gifts. She is thinking of starting a second website, which would specialize in just one of the lines she carries on her first website. That line would be carried on both sites.

The current businss is a sole proprietor LLC and does business under a dba. She wants to be able to use the same bank, credit etc accounts for both businesses. New website would have a seperate dba. Would the new website be considered a second business for tax purposes requiring a seperate set of books and a seperate ScheduleC?

[DaveO]

Not in my opinion

In both cases she is engaged in the direct sale of merchandise to the public. She may want to track income and expense using "class" or "department" codes to see which site is performing better.

[erchess]

Agree with Dave

completely. Look at it this way - if she opened a bricks and mortar store selling some or all of the same products she could treat that as the same business if she desired. I would like others to chime in on all this but I believe she is equally free to call the new website or the bricks and mortar store a new business perhaps with a different kind of entity if she wanted to. Doing that might make sense if she is thinking of eventually selling one or the other or of selling both but to different buyers.

[taxea]

2nd business?

I agree with DaveO. She is selling the same type of merchandise...it is one business for tax purposes...She could keep separate records if she wants to know how much income/expense each of the business is creating but there is no need to separate the business on the tax return. I would make it a separate business only if they weren't similar in nature. taxea

[BHoffman]

Second dba

I don't think the IRS cares much about names and identifies using the EIN or SS. So, the business(es) can be called anything as long as the nature is the same. Just don't call them late for supper.