Tax,
Intellectual Property,
Civil Litigation
Jan. 26, 2021
Capital gains in patent cases: When is a recovery not taxed as ordinary income?
Most people — even those who know very little about taxes — are likely to say that a stream of royalties is probably taxed as ordinary income.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
Suits for the infringement of patents or other intellectual property are usually asking for lost royalties, the stream of payments that the inventor would have collected but for the infringement. Most people -- even those who know very little about taxes -- are likely to say that a stream of royalties is probably taxed as ordinary income. Of course, that is right, a stream of royalty payments is clearly ordinary income.
How then coul...
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