26 U.S.C. § 1249
Gain from the sale or exchange 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.
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.
26 U.S.C. § 1249
EDITORIAL NOTES
AMENDMENTS2014-Subsec. (a). Pub. L. 113-295 struck out "after December 31, 1962," before "of a patent". 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".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113-295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113-295 set out as a note under section 1 of this title.
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 DATEPub. 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."
- United States person
- The term "United States person" means-(A) a citizen or resident of the United States,(B) a domestic partnership,(C) a domestic corporation,(D) any estate (other than a foreign estate, within the meaning of paragraph (31)), and(E) any trust if-(i) a court within the United States is able to exercise primary supervision over the administration of the trust, and(ii) one or more United States persons have the authority to control all substantial decisions of the trust.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.