LLC Remains Patent Holder of Asset for Capital Gain Purposes
Harvey, Carol Kulish
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Three co-inventors obtained patents for their inventions. Later, in exchange for membership interests in a new LLC, the inventors transferred their interests in the product to the company. The IRS ruled that the LLC was a disregarded entity for federal tax purposes and would be treated as a partnership. This short analysis discusses the tax treatment of future dispositions of interests in the patents.