Intangible Assets

It is obvious that intellectual property has come of age. Intellectual property become a very important aspect of American business life and a valuable business asset. 

Patents, Trade Secrets, Copyrights, Trademarks, Trade names,  Domain names, Computer software, Web Contents and other forms of IP assets represents an estimated 60% of corporate assets.

The IRS has gone from barely acknowledging intellectual property to providing  alternatives in how to structure intellectual property transactions. Significantly the IRS has accepted exchanging intellectual properties that are like kind to each other.

A key aspect of intellectual exchanges is careful advance planning and identification of the nature and character of the intellectual properties involved, including the bundle of rights involved and the underlying nature of the business involved on the exchange.  

Secondly, as is the case with the purchase and sale of assets in business transactions,  multi asset exchanges must specifically identify the assets in advance, at the time of the negotiation and execution of the purchase and sale document. This aids in the matching of asset classes and allocation of debt, if any.  For those familiar with asset purchase transactions, many times the identification and allocation of purchase price is attached to the deal documents months later.  This is not possible with the like kind exchange of intellectual property.