Taxation of Intellectual Property and Technology

Taxation of Intellectual Property and Technology

Taxation of Intellectual Property and Technology is continually revised to fully integrate the latest legislative, administrative, and judicial changes in the tax law as well as the patent, trademark, copyright and trade secret laws. It is a comprehensive guide to the federal tax consequences of the development, purchase, sale and licensing of intellectual properties, including inventions whether or not patentable), trade secrets, trademarks, trade names, copyrights and computer software. More specifically, this book recognizes and addresses the need to minimize the tax impact of these transactions. 

Taxation of Intellectual Property and Technology in the LexisNexis® Store provides current analytical insight into:

Patentable Inventions. Analysis of the America Invents Act. See § 1.04[1].

Intangibles Costs Under IRC Section 263(a) and INDOPCO. Proposed Regulations § 1.263A-1(e)(3)(ii)(U)(1) expands the definition of licensing costs (required to be capitalized) to include " . . . fees, payments, and royalties otherwise described in this paragraph . . . that a taxpayer incurs (within the meaning of section 461) only upon the sale of property produced or acquired for resale." See § 3.04.

Property Versus Services, Primarily in Employee to Employer Transfer. In Farris v. Commissioner, the inventor applied for and received four patents with respect to a needleless syringe. The inventor subsequently transferred all of these patents to a pharmaceutical manufacturing and packaging business, for "$1 and for other good and valuable consideration." Approximately three months later, the inventor entered into a sales representative agreement with the transferee of the patents. The representative agreement retained the inventor as an independent contractor for the purpose of selling the transferee's "Smart Amp Products." The Tax Court found that the services were unrelated to the transfer of the patents and treated the payments under the representative agreement as ordinary income rather than as a payment subject to IRC § 1235. See § 6.04[4].

Calculation of the Qualified Research Expense Credit.

In calculating the qualified research expenditures for the preceding three-year period, if one or more of those three years is a short taxable year, then the qualified research expenditures for such year are deemed to be equal to the qualified research expenditures actually paid or incurred in that year multiplied by 365 and divided by the number of days in that year. See § 9.08

The same insights are also available online at the LexisNexis® Tax Center.