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Insights Vol. 6 No. 2: Updates & Other Tidbits

Insights Vol. 6 No. 2: Updates & Other Tidbits

This month, Neha Rastogi and Nina Krauthamer look at interesting items of tax news from around the world: A new foreign investment law could ease the U.S.-China trade war, and another illegal State Aid investigation has been announced — this time over Dutch tax rulings issued to Nike and Converse.

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Tax Considerations of I.P. When Expanding a Business Offshore

Tax Considerations of I.P. When Expanding a Business Offshore

If a client asks a U.S. tax adviser about the U.S. tax cost of contributing intangible property (“I.P.”) to a foreign corporation for use in an active business, the response can be a dizzying array of bad tax consequences beginning with a deemed sale in a transaction that results in an ongoing income stream. While that is a correct answer, it need not be the only answer. Elizabeth V. Zanet and Stanley C. Ruchelman explore alternatives to a capital contribution of I.P. to a foreign corporation, including (i) the use of a foreign hybrid entity and (ii) licensing the I.P. to a foreign entity in order to benefit from the F.D.I.I. tax deduction. Each alternative may provide interesting tax results, but attention to detail will be required.

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Tax Basics of Intellectual Property

Published in Landslide Volume 10 Issue 6, © 2018 by the American Bar Association.

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Tax 101: Taxation of Intellectual Property—Selected Tax Issues Involving Corporations and Partnerships

Published in The Licensing Journal vol. 37, no. 9 (October 2017): pp. 11-18.

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Tax 101: Deemed Annual Royalty on Outbound Transfers of I.P. to Foreign Corporations

Tax 101: Deemed Annual Royalty on Outbound Transfers of I.P. to Foreign Corporations

U.S. tax law contains provisions that attempt to discourage the outbound migration of intangible assets including specific rules that target transfers affected through corporate inversions.  Elizabeth V. Zanet and Stanley C. Ruchelman discuss the history and current standing of those provisions, while pointing out an alternative that is currently available to limit ongoing tax liability in the context of a start-up operation.

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