Intellectual Property Taxation: Transaction and Litigation Issues, Second Edition, with 2015 Supplement

A clear and comprehensive guide to the tax treatment of major intellectual property transactions and decisions, this treatise contains planning pointers and checklists related to the tax consequences of creating, acquiring, and transferring many kinds of IP, including emerging forms of IP such as digital content and domain names.


Comprehensive and clear explanations of the tax treatment of major IP transactions and decisions

Intellectual Property Taxation: Transaction and Litigation Issues, Second Edition, with accompanying CD-ROM, considers, on a comparative basis, the tax implications of major business transactions involving both traditional and emerging forms of intellectual property. The authors’ analyses strike a perfect balance between technical tax considerations and the complexities of intellectual property transactions.

Topics discussed include IP holding companies, research and development limited partnerships, and cost-sharing arrangements; taxation of emerging forms of IP assets, such as domain names and web content; new tax regulations governing IP development costs; federal and state tax treatment of e-commerce transactions, including sales of online music, digital content, and software; and international tax rules governing IP development, acquisitions, licenses, and transfers. The treatise also examines the tax treatments of damages, settlement awards, and litigation costs in IP litigation, as well as software development, acquisitions, and transfers; and charitable gifts of IP. It also provides charts and detailed explanations of state taxation of online transactions such as online sales and licensing of goods and software, digital music, and website development.


The new Second Edition provides:

  • Added “Planning Pointers” and “Practical Checklists” related to the tax consequences of creating, acquiring, and transferring intellectual property
  • New chapters on the tax treatment of intellectual property held by business entities and non-profit organizations
  • Expanded coverage of popular tax planning strategies used in connection with IP, including new guidance on the use of domestic and international subsidiary corporations
  • Additional discussions in “plain English” of transfer pricing and cost sharing arrangements
  • A new chapter on estate planning for intellectual property, including special tax and non-tax considerations for IP owners


    The 2015 Supplement contains significant tax developments affecting intellectual property and litigation, including the following: 

    • Congress’ extension of research tax credit with the Tax Increase Prevention Act of 2014.
    • IRS final regulations governing the deductibility of research and experimental expenditures under section 174; new regulations dealing with the alternative simplified credit under section 41(c)(5), and long-awaited, favorable proposed regulations with respect to the development of internal-use software
    • recent IRS rulings addressing the deductibility of royalties paid under a patent license and the deductibility of legal fees incurred in defense against patent infringement, as well as recent rulings denying tax exempt status to software organizations
    • Cases dealing with the deductibility of book-writing expenses, the deductibility of so-called “theft” losses when “pirates” steal intellectual property underlying a patent, and the ability of small businesses to claim the research tax credit for a broad range of innovation (both applied and basic science research)
    • A Tax Court case of first impression addressing whether retention of control by a patent transferor over an unrelated corporate transferee can defeat capital gain treatment under section 1235
    • New state tax updates impacting the popular domestic intellectual property holding company, as well as newly updated federal and state rules for Internet taxation, including updated charts and summaries for all 50 states
    • And more.


Bloomberg BNA authors and editors are practicing professionals with insider perspectives and real-life experience. Learn more about this book’s authors and editors.
Jeffrey A. Maine, B.B.A., M.B.A., J.D., LL.M., C.P.A., is a Professor of Law at the University of Maine School of Law, Portland, ME.

Xuan-Thao N. Nguyen,  B.A., J.D., is the Gerald L. Bepko Chair and Director, Center for Intellectual Property Law and Innovation, Indiana University Robert H. McKinney School of Law, Indianapolis, IN.


View full tables of contents and read the book’s preface or introduction.