Taxation of Intellectual Property: IRC 1235, FDII and GILTI, Taxation of Moving IP Offshore

Under current tax law, the tax treatment of IP may result in unexpected consequences for inventors and holders of such assets. Tax counsel and advisers must understand the complex tax rules impacting the ownership of IP assets and implement effective techniques in structuring transactions.

Key changes from tax reform impacting IP included the reduction of the corporate tax rate to 21 percent, rules on FDII, applicability of the GILTI regulations, and other vital considerations affecting transactions involving IP assets. Under prior tax law, patents and unpatented inventions created by an individual taxpayer were considered to be capital assets resulting in capital gains upon sale. Revised Section 1221(a)(3) now classifies these items as non-capital assets, subjecting owners and holders to potentially higher tax liabilities.

Tax counsel and advisers must be knowledgeable of these complicated tax rules to adequately structure transactions involving IP assets to avoid any unintended tax liability for taxpayers.

Listen as our panel discusses the taxation of intellectual property under current U.S. tax law and offers effective planning techniques in structuring transactions involving IP assets.

1. Taxation of IP assets under current U.S. tax law
2. Capital gain treatment under revised Section 1221 and application of Section 1235
3. Dynamics of FDII as applied to IP ownership and development
4. GILTI and CFCs holding IP assets
5. Best practices and techniques in structuring transactions for IP assets

The panel will discuss these and other key issues:

• Tax provisions impacting the creators and holders of intellectual property
• The dynamics of revised Section 1221 and maintaining capital gain treatment of IP
• Understanding the benefits and pitfalls of FDII rules relating to IP
• Application of GILTI for holders of IP assets
• Tax planning techniques in structuring transactions involving IP assets

Learning Objectives

After completing this course, you will be able to:

• Identify tax provisions specifically impacting the sale or purchase of IP under current tax law
• Recognize tax implications of transactions involving IP assets
• Understand the application of GILTI to holders of IP assets
• Ascertain the benefits and potential pitfalls of FDII rules in transfers of IP

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or professional experience at mid-level within the organization, preparing complex tax forms and schedules. Specific knowledge and understanding of international taxation, deferred foreign-source income, earnings and profits, controlled foreign corporations, specified foreign corporations, and repatriation of deferred foreign earnings; tax implications in the purchase and sale of assets.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).