Intellectual property can sneak up on some businesses as it may start from a “good idea” that helps the business survive, then gradually become an integral part of the business and later become a critical part of its existence. Interestingly, Intellectual property also comes in many ‘shapes and sizes.’
A business, therefore, needs to recognize these different ‘shapes and sizes’ so if they choose to sell their business, they have the proper legal protection in place that protects an intellectual property asset and therefore rightly earns the owner the amount it is worth.
Different types of Intellectual property?
The IRS recognizes the following when they are part of a business transaction.
- Patents
- Computer Software
- Trademarks
- Recipes
- Engineering Designs
- Copyright resale
- Trade Secrets
- Architectural Designs
The Bottom Line
The intellectual property carries both legal and tax implications. An attorney is an expert to engage to understand and obtain the necessary legal protection. Not all attorneys have the necessary knowledge, so if this is an essential component of your business, you may want help from an attorney who understands and specializes in intellectual property law.
Similarly, the tax treatment of intellectual property when a business is being acquired or sold requires research to determine the correct position, which a CPA or similar tax professional can best provide. That is, the tax treatment for a patent may be different from that of a copyright, which may be different from that of computer software, etc.
Are you thinking about selling your business? Would you like to know the value of your business? For more information, please visit my website, Business Valuation.
For more immediate help, you are welcome to send an email to Andrew Rogerson or give me a call at (Toll-Free): (844) 414-9700
Further reading