IRS Publication 535 & Section 197 Non-Intangibles

Not all assets are created equal, so that trademarks can be considered intangible while patents and copyrights may not be if acquired separately from a business:

The following assets are not section 197 intangibles.

1. Any interest in a corporation, partnership, trust, or estate.
2. Any interest under an existing futures contract, foreign currency contract, notional principal contract, interest rate swap, or similar financial contract.
3. Any interest in land.
4. Most computer software. (See Computer software , later.)
5. Any of the following assets not acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business.
   1. An interest in a film, sound recording, video tape, book, or similar property.
   2. A right to receive tangible property or services under a contract or from a governmental agency.
   3. An interest in a patent or copyright.
   4. Certain rights that have a fixed duration or amount. (See Rights of fixed duration or amount , later.)
6. An interest under either of the following.
   1. An existing lease or sublease of tangible property.
   2. A debt that was in existence when the interest was acquired.
7. A right to service residential mortgages unless the right is acquired in connection with the acquisition of a trade or business or a substantial part of a trade or business.
8. Certain transaction costs incurred by parties to a corporate organization or reorganization in which any part of a gain or loss is not recognized.

 

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