Tax Issues and Intellectual Property

Tax Issues and Intellectual Property

Income from intellectual property continues to be an increasing contributor to economic growth.  Too often, however, the creator and financial advisor find themselves in a gray area when it comes to the changing tax laws surrounding patents and copyrights.  Proper planning and a clear understanding of the most recent developments are essential when it comes to affecting the creator’s tax liability.  In a thorough article from the AICPA’s The Tax Advisor, some of the most important issues regarding intellectual property and income are addressed, including:  royalties as business and non-business income, appropriate deductions, exemptions from uniform capitalization rules, sale or exchange of intellectual property, inheritance issues, and more.