Hiram Is a Computer Engineer And, While Unemployed, Invents a Switching

question 63

Multiple Choice

Hiram is a computer engineer and, while unemployed, invents a switching device for computer networks. He patents the device, but does not reduce it to practice. Hiram has a zero tax basis for the patent. In consideration of $800,000 plus a $1 royalty per device sold, Hiram assigns the patent to a computer manufacturing company. Hiram assigned all substantial rights in the patent. Which of the following is correct?

• A)Hiram automatically has long-term capital gain from the lump sum payment, but not from the royalty payments.
• B)Hiram automatically has long-term capital gain from the royalty payments, but not from the lump sum payment.
• C)Hiram automatically has long-term capital gain from both the lump sum payment and the royalty payments.
• D)Hiram does not have automatic long-term capital gain from either the lump sum payment or the royalty payments.
• E)None of the above.

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Definitions:

Value Neutrality

The principle of remaining unbiased and detached from personal beliefs or values when conducting research or engaging in professional practice.

Value Set

A specific range of values, often used in healthcare to categorize different types of data such as diagnoses, medications, or procedures.

Ventilator Dependent

A condition in which an individual requires the assistance of a mechanical ventilator to breathe continuously or for extended periods.

Values

Core beliefs and principles that guide and motivate attitudes and actions.