Discussion:Patent filing costs

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Discussion Forum Index --> Advanced Tax Questions --> Patent filing costs
Discussion Forum Index --> Tax Questions --> Patent filing costs

Newarcher (talk|edits) said:

10 May 2008

Hi,

Picked up an extension return this week. The owner of an LLC (disregarded) has what he calls 'Patent filing fees'. To make life easy, he is electing to expense them in the current year and therefore owes no separate declaration of the fact.

I am going to put them in "other expenses" on Schedule C but I cannot figure out whether I need to add them as a simple line item addition or create a separate F4562 for them and list them under amortization with a specific code section. Publication 535 is sufficiently vague to leave me wondering.

Can anyone clarify for me?

Thanks,

Michael

RoyDaleOne (talk\|edits) said:	10 May 2008
Reg. 1.174-3 The taxpayer may do so by claiming in his income tax return for such year a deduction for his research or experimental expenditures

Marcilio (talk\|edits) said:	11 May 2008
Is this a start-up or does TP already have products being manufactured?

Newarcher (talk|edits) said:

11 May 2008

He is a start up established in 2007. He doesn't have the patent and the money was paid to legalzoom so I am not sure it will ever lead to a patent. His idea isn't so much for a product but it is a technology based music and media delivery system to your cell phone.

I read the regs and I am sure that he can deduct it (without the separate page endorsement) but I just don't know if an unsupported schedule C "Other" expense line item is enough or if I should list it on 4562.

Thanks,

Michael

RoyDaleOne (talk\|edits) said:	11 May 2008
It doesn't go on the 4562. Put it on the Schedule C. If you want add a statement that you are taking a deduction for research expenditures.