Discussion:Patents and amortization
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Discussion Forum Index --> Advanced Tax Questions --> Patents and amortization
Discussion Forum Index --> Tax Questions --> Patents and amortization
Sirasko-pico (talk|edits) said: | 8 July 2008 |
| Must a patent on the books of a C Corp be amortized for tax purposes if the patent is not in use? The patent was developed years ago. | |
Sirasko-pico (talk|edits) said: | 8 July 2008 |
| I'm familiar with this section of the Code, but my question is whether they are required to amortize the patent. I can't find anything that says they must. Does anyone know if they are required to amortize it? | |
| 8 July 2008 | |
| Depends on the nature of the patent... Sec. 197 states you start amortizing on the month of the acquisition of the intangible if it was an acquired patent. If it is an self created patent, no sec 197 amortization. | |
RoyDaleOne (talk|edits) said: | 8 July 2008 |
| How old is the patent? | |
| 8 July 2008 | |
| interesting read:
Letter Ruling 200243002 (food for thought) =) | |
Sirasko-pico (talk|edits) said: | 8 July 2008 |
| Some additional facts: the patent is self-created and is probably 20 years old or more. I've also come across some things that note that one of the requirements to depreciate or amortize an asset is that it must be "placed in service". Because the patent was developed years ago and is not being used (has never been used), it would seem that it is not "placed in service" yet, and therefore is not a candidate for amortization -- whether they want to amortize or not. | |
RoyDaleOne (talk|edits) said: | 8 July 2008 |
| 1. Check self-created intangibles not 197 intangible?
2. Section 197 added in 1993? If so, is asset to old? | |
| 8 July 2008 | |
| How long do patents usually last? Maybe it is time to write it off =) | |
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