Pharma and Life Sciences Tax News, Vol. 12, No. 7

May 2013
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Pharma and Life Sciences Tax News, Vol. 12, No. 7

At a glance

The IRS concluded in a field attorney advice (FAA 20124401F) that minimum royalties paid for the use of licensed patents must be capitalized in part to ending inventory under Section 263A.

Minimum royalties must be capitalized to ending inventory, IRS concludes - 3 May, 2013

The IRS concluded in a recently released field attorney advice (FAA 20124401F) that minimum royalties paid for the use of licensed patents must be capitalized in part to ending inventory under Section 263A. The conclusions reached in the FAA could impact pharmaceutical companies that license intellectual property used to develop, manufacture, market or sell their products under agreements that require the payment of minimum royalties.