Buying, Selling and Licensing IP: How Several Factors Can Vary Taxation of Intellectual Property

Buying, selling and licensing intellectual property has become more common, and banks are beginning to appreciate the fact that IP, such as a patent, trade name or logo, is an asset of real value.

"If Coke needs money, it could traditionally get a loan based on its tangible assets or cash flow, but Coke can now also get a loan based on the value of its intangible assets, such as its trademarks - the look of the bottle and the Coca-Cola name," says David C. Blum, partner with Levenfeld Pearlstein, LLC.

However, when buying, selling or licensing IP, businesses should be aware that there are federal and state tax considerations involved, which, depending on how it is structured, can either cost or save you money on taxes.

Smart Business spoke with Blum about how to structure an IP transaction to maximize tax benefits. 

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