A Taxpayer Sells a Patent on a New Algorithm for a Gain

question 963

Multiple Choice

A taxpayer sells a patent on a new algorithm for a gain. Which taxpayer will be allowed capital gain treatment for the sale? Assume that the patent had not been placed in service as of the acquisition date.

• A) a corporation who purchased the patent from the inventor
• B) a sole proprietor who purchased the patent from the inventor
• C) Both of the above.
• D) None of the above.

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Definitions:

Corrective Steps

Actions taken to rectify or correct an identified problem or to address a deviation from planned or expected performance.

Objective

A specific, measurable, achievable, relevant, and time-bound goal that drives actions and decisions in a particular direction.

Planning And Control Functions

Essential managerial activities that involve setting objectives, establishing strategies to achieve them, and monitoring the progress to ensure goals are met efficiently and effectively.

Successful Organizations

Entities that consistently achieve their objectives, satisfy their stakeholders, maintain financial stability, and exhibit growth.