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Tax 101: Virtual Currency – What Is It? And How Is It Taxed?

Tax 101: Virtual Currency – What Is It? And How Is It Taxed?

With the recent launch of Bitcoin futures trading, this once obscure asset class may soon become a mainstream investment.  Alev Fanny Karaman delves into the details of virtual currency in the U.S. context.  She explains the blockchain computations that make Bitcoin and other cryptocurrencies attractive to investors and the U.S. tax treatment and reporting obligations of virtual currency holders.

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

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

Tax 101 continues its series regarding the U.S. Federal tax considerations involving the creation, acquisition, use, license, and disposition of intellectual property (“I.P.”).  This month, Elizabeth V. Zanet and Stanley C. Ruchelman focus on I.P. held through a corporation or a partnership/L.L.C.  In particular, the not-well-understood rules regarding the sale of interests in a partnerships/L.L.C.’s owning “hot assets” are explained.  Not all gain benefits from favorable long-term capital gains tax rates.

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Tax 101: Taxation of Intellectual Property – The Basics

Tax 101: Taxation of Intellectual Property – The Basics

This month, Tax 101 presents an overview of the basic U.S. Federal tax considerations of transactions that occur over the life cycle of intellectual property (“I.P.”) – from its creation to its acquisition, exploitation, and ultimate sale in a liquidity event.  The article address several important questions: Should expenditures be capitalized or deducted?  If capitalized, over what period is the expenditure amortized?  How are acquisitions of I.P. reported to the I.R.S. when an entire business is acquired?  What is the character of gain on sale?  When is a sale treated as a license?  And when is a license treated as a sale?  Elizabeth V. Zanet and Stanley C. Ruchelman explain.

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Value-Added Tax 101 – A Far Cry from a Border Tax

Value-Added Tax 101 – A Far Cry from a Border Tax

Although the U.S. is the world’s largest economy, it is the only world economy that does not have a national value-added tax (“V.A.T.”).  Until the border adjustment tax (“B.A.T.”) proposals were floated, most cross-border tax advisers in the U.S. only had vague concepts of the workings of a national V.A.T.   Fanny Karaman and Stanley C. Ruchelman explain the mechanics of the V.A.T. as enacted in the E.U., cautioning that the B.A.T. is not a V.A.T.

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