26-U.S.C.-1249

§1249 – Gain From Certain Sales Or Exchanges of Patents, Etc., to Foreign Corporations

Pathway

Title 26 > Subtitle A > Chapter 1 > Subchapter P > Part IV > Section 1249

Details

• Reference: Section 1249
• Legend: §1249 – Gain From Certain Sales Or Exchanges of Patents, Etc., to Foreign Corporations
• USCode Year: 2013

Provision Content

(a) General rule

Gain from the sale or exchange after December 31, 1962, of a patent, an invention, model, or design (whether or not patented), a copyright, a secret formula or process, or any other similar property right to any foreign corporation by any United States person (as defined in section 7701(a)(30)) which controls such foreign corporation shall, if such gain would (but for the provisions of this subsection) be gain from the sale or exchange of a capital asset or of property described in section 1231, be considered as ordinary income.

(b) Control

For purposes of subsection (a), control means, with respect to any foreign corporation, the ownership, directly or indirectly, of stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote. For purposes of this subsection, the rules for determining ownership of stock prescribed by section 958 shall apply.

(Added Pub. L. 87–834, §16(a), Oct. 16, 1962, 76 Stat. 1045; amended Pub. L. 89–809, title I, §104(m)(3), Nov. 13, 1966, 80 Stat. 1563; Pub. L. 94–455, title XIX, §1901(b)(3)(K), Oct. 4, 1976, 90 Stat. 1793.)

Amendments

1976—Subsec. (a). Pub. L. 94–455 substituted ordinary income for gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231.

1966—Subsec. (a). Pub. L. 89–809 substituted Gain for Except as provided in subsection (c), gain.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Effective Date of 1966 Amendment

Amendment by Pub. L. 89–809 applicable with respect to taxable years beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89–809, set out as a note under section 11 of this title.

Effective Date

Pub. L. 87–834, §16(c), Oct. 16, 1962, 76 Stat. 1045, provided that: The amendments made by this section [enacting this section] shall apply to taxable years beginning after December 31, 1962.

U.S. Encyclopedia of Law Coverage

26-U.S.C.-1212 in the Legal Encyclopedia: Income Taxes

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26-U.S.C.-1246, in the Legal Encyclopedia: Tax Liability

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26-U.S.C.-1245 in the Legal Encyclopedia: Taxation

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26-U.S.C.-1240 in the Legal Encyclopedia: Capital Gains

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