Larry Was the Holder of a Patent on a Video

question 137

Essay

Larry was the holder of a patent on a video game. During 2014, he sold all substantial rights in the patent for $365,000 in cash and a 3% royalty on the purchaser's first $10,200,000 of sales each year related to the product in which the patent is incorporated. Larry had not reduced the patent to practice. He had a $86,000 basis for the patent. During 2014, he received $30,000 in royalties. What is the nature and amount of Larry's gain?

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Definitions:

Neurogenesis

The process of generating new neurons in the brain, contributing to brain plasticity and function.

Parkinson's Symptoms

Indications of Parkinson's disease, including tremors, muscle stiffness, and movement difficulties.

Arthritis Flare-Up

A sudden and temporary increase in symptoms of arthritis, including joint pain, swelling, and stiffness.

Range Of Motion

The full movement potential of a joint, usually its range of flexion and extension.