Intellectual Property Taxation: Transaction and Litigation Issues, Second Edition, with 2016 Cumulative 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 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 

New in the 2016 Cumulative Supplement:

  • Discussion of the Protecting Americans from Tax Hikes (PATH) Act of 2015, which made permanent the research tax credit, expanded the credit so that some start-up companies and small businesses can use it to offset payroll taxes or the alternative minimum tax, made permanent the deduction for off-the-shelf software, and extended a number of other tax benefits, including the deduction for film and television productions.  
  • A summary of recent IRS guidance on the tax treatment of domain names—the first guidance on domain name taxation provided by the IRS.   
  • Review of recent IRS ruling addressing the deductibility of salaries of researchers  
  • Recent rulings on the tax treatment of ERP software, as well as rulings denying tax exempt status to research organizations.  
  • Cases dealing with the deductibility of film production costs and the deductibility of photography expenses.   
  • Discussion of a case distinguishing for tax purposes a patent sale from a patent license, and a case on the tax treatment of patent litigation costs. 
  • Recent developments related to state challenges to the intellectual property holding company model, including the enactment of so-called “add-back” statutes and adoption of so-called “combined reporting.”   
  • Newly updated federal and state rules for Internet taxation, including updated charts and summaries for all 50 states.  
  • Analysis of the trend toward shifting intellectual property and related income offshore to low-tax or no-tax jurisdictions, including some of the ways U.S. based multinational entities have been able to avoid many of the existing anti-deferral provisions in the Code, and some of the proposals that have been made to limit income shifting


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.