Associated Patentees, Inc. v. Commissioner
United States Tax Court
Four individuals transferred to petitioner certain patents which they jointly owned in equal proportions under a contract obligating petitioner to pay them 80 percent of its income from licenses granted for their use. Under this contract petitioner paid them $ 42,209.76 in the taxable year and in its return deducted that amount as royalties paid. Held: (1) This payment was a capital expenditure in acquisition of the patents.
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Four individuals transferred to petitioner certain patents which they jointly owned in equal proportions under a contract obligating petitioner to pay them 80 percent of its income from licenses granted for their use. Under this contract petitioner paid them $ 42,209.76 in the taxable year and in its return deducted that amount as royalties paid. Held: (1) This payment was a capital expenditure in acquisition of the patents. (2) Petitioner is entitled to recover by depreciation its total cost of the patents over their lives and, since such cost is not determinable until the close of the term…
1Opinion of the Court
Associated Patentees, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent
Associated Patentees, Inc. v. Commissioner
Docket No. 112051
United States Tax Court
4 T.C. 979; 1945 U.S. Tax Ct. LEXIS 204;
March 15, 1945, Promulgated
Decision will be entered for the petitioner.
Four individuals transferred to petitioner certain patents which they jointly owned in equal proportions under a contract obligating petitioner to pay them 80 percent of its income from licenses granted for their use. Under this contract petitioner paid them $ 42,209.76 in the taxable year and in its return deducted…
2Cases cited4 opinions
- John A. Nelson Co. v. HelveringSupreme Court of the United States · 1935
- John A. Nelson Co. v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1935
- Associated Patentees, Inc. v. CommissionerUnited States Tax Court · 1945
- John A. Nelson Co. v. CommissionerUnited States Board of Tax Appeals · 1933