It Does Not Compute: Copyright Restriction on Tax Deduction for Developer’s Donation of Software

Great amounts of wealth can be represented by intellectual property (“IP”), including computer software. Computer software creators, and other inventors, artists authors, may desire to enthusiastically support their favorite charitable endeavors. The tax consequences for the creative genius donating his or her IP charity will depend on whether creation is protected patent, trade secret trademark one hand, copyright other. In general, donor a enjoys favorable treatment – he she entitled claim an income deduction full fair market value donated. contrast, as result Tax Reform Act 1969, not allowed instead, only cost basis in (which very small, nothing). following example demonstrates different results possible.