J. M. & M. S. Browning Co. v. Commissioner

1. License agreements for the use of patents are intangible property. The right to receive royalties thereunder is likewise intangible property and when paid into a corporation for a nominal consideration can not be included in invested capital under section 326(a)(3) of the Revenue Act of 1918. 2. The fair market value as of January 2, 1915, of right to receive royalties under certain license agreements, and the manner of computing the deduction for the exhaustion thereof, determined. 3. The petitioner accepted a lump sum in lieu of the royalties which would be payable under contracts owned…