Gain on Sale of a Patent by an Inventor Generally

question 115

True/False

Gain on sale of a patent by an inventor generally is ordinary income.

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Definitions:

FICA-OASDI

Federal Insurance Contributions Act - Old Age, Survivors, and Disability Insurance, a payroll tax that funds the Social Security and Medicare programs in the United States.

FICA-Medicare

The part of the Federal Insurance Contributions Act tax that is specifically allocated to fund Medicare, the United States’ federal health insurance program for individuals who are 65 years of age and older, certain younger people with disabilities, and people with End-Stage Renal Disease.

W-3 Forms

A tax form used in the United States to transmit a summary of all W-2 forms issued by an employer to the Social Security Administration.

Total Federal Income Tax

The sum of all taxes owed to the federal government by an individual or entity in a fiscal year after deductions and credits.