Website Development Costs
Generally, any website costs that are not software are classified as website content. This includes literary content, graphics, sound, and video.
Advertising content is deducted currently. All other content is capitalized if it has a useful life extending beyond the current year.
Internet Domain Names
Domain names are generally regarded as intangible personal property. The nominal annual domain name registration fees are generally deductible.
However, if a retailer acquires a domain name, then capitalization should be considered under Treas. Reg. 1.263(a)-4(b). The retailer is paying for a property interest that meets the definition of a purchased intangible.
Some retailers may acquire multiple domain names at premiums to protect the reputation of their business which may be considered for capitalization.