Lanova Corp. v. Comm'r
United States Tax Court
1. Cost basis of patents used in the petitioner's business determined for purpose of computing equity invested capital and depreciation deductions. 2. Certain capital expenditures relating to the development and procurement of patents held proper additions to the cost basis thereof. 3. Expenditures relating to the procurement of royalty producing licenses for the use of patents held capital expenditures recoverable through amortization deductions spread ratably over the life…
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1. Cost basis of patents used in the petitioner's business determined for purpose of computing equity invested capital and depreciation deductions. 2. Certain capital expenditures relating to the development and procurement of patents held proper additions to the cost basis thereof. 3. Expenditures relating to the procurement of royalty producing licenses for the use of patents held capital expenditures recoverable through amortization deductions spread ratably over the life of the licenses. 4. Legal fees paid with petitioner's capital stock at a valuation agreed upon by the parties held…
1Opinion of the Court
OPINION.
LeMire, Judge:
The value, or cost basis, of the Lang inventions both for the purpose of invested capital and the computation of exhaustion deductions is the first and principal issue for consideration.
Respondent’s position is that petitioner acquired its rights in the inventions from Vaduz in a nontaxable transaction in exchange solely for its capital stock; that Vaduz in turn acquired them from Lang in a similar transaction; and that, therefore, the cost basis to petitioner is the cost of the rights, to Lang, the original transferor. He argues that neither the cost of the inventions…
2Cases cited2 opinions
- Hershey Mfg. Co. v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1930
- Commissioner of Internal Revenue v. McKinneyCourt of Appeals for the Tenth Circuit · 1937
3Cited by15 opinions
- Pittsburgh Terminal Corp. v. CommissionerUnited States Tax Court · 1973
- Hudlow v. CommissionerUnited States Tax Court · 1971
- Simmonds Precision Prods. v. Comm'rUnited States Tax Court · 1980
- James v. CommissionerUnited States Tax Court · 1969
- Holstein v. CommissionerUnited States Tax Court · 1955
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