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Article #417: Intellectual Property And Estate Taxes

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Nowadays many people have their wealth in person's death. Different intellectual
both tangible and intangible assets. properties like copyrights, patents etc
These intangible assets are also known as use different methods to decide the
intellectual property. It includes market value of the property. On the
patents, copyrights, trademarks and even basis of these findings, the value of the
trade secrets. Many a times the value intellectual property is added to the
people are in possession of thus is much gross estate. The valuation analysis is
higher than the physical assets. subjective and so the ideal method to
The commercialization and widespread use choose is the one that will give you the
of the Internet provides everyone the lowest value. Although this may not be
chance to create intellectual property. the best method when valuation is done
This is no longer restricted to the large for other purposes, but it is highly
Multi National Corporations or the recommended when the main objective is to
affluent few. Everyone has the right and calculate your tax liability.
the capability to develop such property Many a times the value of the
with the help of copyrights, trademarks intellectual property will be higher than
or inventions that can be patented. the value of the liquid cash or assets
Although the intellectual property grows that are available in hand. This means
as a wealth-creating tool, it is added to that you will not have sufficient cash to
your estate taxes. You will also be faced pay the taxes. If and when you are in
with the task of determining the value of such a situation, then you will be
this property so that it can be added to required to sell some part of your estate
your estate to calculate the taxes. to meet the expenses. You also have the
A person's intellectual property, alternative to utilize the tax payment
especially copyrights, make a lot of deferment that the Internal Revenue
difference while estimating the estate Code(IRS) allows the taxpayers. Code 6161
taxes. It is necessary to know the value of the IRS allows a deferment of estate
of all the assets including the taxes for up to ten years as long as a
intellectual property to be able to find reasonable cause is provided by you.
out the value of the estate. When One of the causes that the IRS considers
calculating the value of the gross reasonable is proof showing that the
estate, it will also include retirement taxes cannot be paid due to the illiquid
accounts, joint property etc. As of now, intellectual assets that encompass your
the maximum limit up to which the estate estate. You are given time to consider
tax is exempt is $2 million. In 2009, the other options available to you to
this limit is said to be increased to a make the payments and ensure that you do
sum of $3.5 million. not take some hasty decision like selling
The valuation of the intellectual property. Nevertheless, you will be
property is based on the fair market entitled to pay interest on the differed
value of the property on the day of the payment.






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