Hershey Mfg. Co. v. Commissioner
United States Board of Tax Appeals
1. A patent application is an assignable property right capable of being valued as evidence of the value of stock of a corporation for which it was exchanged. 2. Costs of development incurred subsequent to the filing of the application for a patent must be shown to add to the capital value of that patent before they can be added to the depreciable base of such patent. 3. A patent application is not a depreciable asset.
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1. A patent application is an assignable property right capable of being valued as evidence of the value of stock of a corporation for which it was exchanged. 2. Costs of development incurred subsequent to the filing of the application for a patent must be shown to add to the capital value of that patent before they can be added to the depreciable base of such patent. 3. A patent application is not a depreciable asset. When a patent issues, however, depreciation may be taken over the life of the patent. 4. Experimental expenses should be charged to capital or expense depending upon the nature…
1Opinion of the Court
*872OPINION.
Siepkin:
The principal question herein presented for our consideration is the basis for computing the depreciation or exhaustion allowance on the Hershey patent for the years in question. The first step in the acquisition of this patent by petitioner consisted of an exchange of 4,000 shares of its common stock issued at the time of incorporation to the inventor, his brother and three associates, for their rights in an application for patent then pending. It is the value of the stock at the time exchanged that is the primary object of our search. Kennedy Construction Co., 4 B. T. A.…
2Cases cited3 opinions
- Marsh v. Nichols, Shepard & Co.Supreme Court of the United States · 1888
- Durham v. SeymourSupreme Court of the United States · 1896
- Keystone Type Foundry v. Fastpress Co.District Court, S.D. New York · 1919
3Cited by31 opinions
- United States Mineral Products Co. v. CommissionerUnited States Tax Court · 1969
- Estate of Stahl v. Comm'rUnited States Tax Court · 1969
- Burde v. CommissionerUnited States Tax Court · 1964
- Lan Jen Chu and Grace Y. P. Chu v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1973
- Sarkes Tarzian, Inc. v. United StatesDistrict Court, S.D. Indiana · 1958
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