Illinois Tool Works, Inc. & Subsidiaries v. Commissioner

117 T.C. No. 4

UNITED STATES TAX COURT ILLINOIS TOOL WORKS, INC. & SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 16022-99. Filed July 31, 2001. P acquired the assets of D and assumed certain liabilities, including the contingent liability for a patent infringement claim. P was subsequently held liable for damages, interest, and court costs. Held: P’s payment in satisfaction of the patent infringement liability is a cost of acquiring the assets of D and must be capitalized in the year incurred. James P. Fuller, Jennifer L. Fuller, Laura K. Zeigler, William…