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

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Wednesday, February 15, 2023

Recorded event now available

or call 1-800-926-7926

This CLE/CPE course will provide tax counsel with practical guidance on the taxation of intellectual property (IP) assets under current tax law. The panel will discuss the tax treatment of patents, design models or other IP assets created by individual taxpayers, Section 1221 and obtaining the benefits of Section 1235, implications of foreign-derived intangible income (FDII) and global intangible low-tax income (GILTI), and key tax considerations in structuring transactions for the purchase or sale of IP assets.

Description

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.

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Outline

  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

Benefits

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

Faculty

Lazarus, Daphny
Daphny Lazarus
Attorney
Fenwick & West

Ms. Lazarus regularly advises on a broad range of domestic and international tax matters, with an emphasis on the tax...  |  Read More

Perryman, Zachary
Zachary Perryman
Managing Director
Ernst & Young

Mr. Perryman is a senior manager in EY’s National Tax Department, based in San Francisco. He advises clients in...  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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