Intellectual property (IP): IP refers to creations of the mind, such as inventions, literary and artistic works, designs, and symbols, names and images used in commerce.
Intellectual property provides some special tax planning opportunities to minimize the income tax consequences associated with the sale / purchase and development of intellectual property and secret processes.
Intellectual property is not limited to patents but includes trademarks, trade secrets, secret formulas, secret processes or recipes. We have identified intellectual properties belonging to clients and successfully structured plans to maximize the tax savings available afforded by the Internal Revenue Code.
The intellectual property you own may have significant value in the consideration of selling your business and possibly generating a revenue stream that continues after the sale of your business.
ADVANCED Planning, employment agreements, royalty agreements and structuring are key for a overall plan to provide a means to minimize taxes and provide for a potential income stream upon a disposition of your business or intellectual property.
The concept not only has potential tax savings for transactions unrelated third parties, but with related parties as well. There is a potential to transfer (sell) the intellectual property that an individual owns or possesses as “know how”, secret formulas, processes, etc to an entity the individual owns all or a part of.