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This document provides information on a net lease investment property located in Belvidere, Illinois that is fully leased to Rockford Health Physicians and Athletico Physical Therapy. The property was constructed in 2015 and features long-term leases with annual rental escalations to investment grade rated Rockford Health and regional physical therapy provider Athletico. Financial details, tenant profiles, demographic data, and marketing materials are included to showcase the investment opportunity.
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Voor de leden van KHN, afdeling Bergeijk, heb ik een social media presentatie & workshop verzorgd. Ik heb de basis van social media uitgelegd, toepassingen voor ondernemers in de horeca uitgelicht. En ik heb praktische uitleg en tips & tricks gegeven over Twitter, Facebook, LinkedIn en Youtube.
Latest ruling could curtail oral testimony as alternative to documentation...
On June 8, 2015, Justice Randall S. Bocock of the Tax Court of Canada in Edmonton upheld CRA assessments whereby software as service provider Highweb & Page Group Inc. was denied SR&ED ITCs on R&D expenditures of $25K in TY2007 and $38K in TY2008.
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The Boulder Group’s Research Department has released a new research report providing comprehensive numbers and analysis of the activity in the National Net Lease Drug Store Market.
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Voor de leden van KHN ,afdeling Bergeijk, heb ik een social media presentatie & workshop verzorgd. De basis van social media is uitgelegd, toepassingen voor ondernemers in de horeca zijn uitgelicht en ik heb praktische uitleg en tips & tricks gegeven over Twitter, Facebook, LinkedIn en Youtube.
This document provides information on a net lease investment property located in Belvidere, Illinois that is fully leased to Rockford Health Physicians and Athletico Physical Therapy. The property was constructed in 2015 and features long-term leases with annual rental escalations to investment grade rated Rockford Health and regional physical therapy provider Athletico. Financial details, tenant profiles, demographic data, and marketing materials are included to showcase the investment opportunity.
Summer Internship Project_Techshu Digital ConsultancyMonika Shah
This document is a summer project report completed by Monika Shah for TechShu Consultancy Pvt. Ltd. on the topic of "Social Media Marketing For Small & Medium Scale Businesses". The report contains an executive summary, chapters on the company profile, project purpose and methodology, data collection and analysis, findings and recommendations. It provides an overview of social media marketing and its importance for businesses. The report analyzes data collected on social media usage and makes recommendations for small and medium businesses to effectively utilize social media marketing.
Social media presentatie & workshop: KHN, afdeling BergeijkPaula van Loon
Voor de leden van KHN, afdeling Bergeijk, heb ik een social media presentatie & workshop verzorgd. Ik heb de basis van social media uitgelegd, toepassingen voor ondernemers in de horeca uitgelicht. En ik heb praktische uitleg en tips & tricks gegeven over Twitter, Facebook, LinkedIn en Youtube.
This document provides an offering summary for a net lease investment property occupied by US Bank in Lockport, Illinois. US Bank recently signed a 10-year lease extension through 2026 for the 5,250 square foot building on nearly 45,000 square feet of land. The property benefits from its location along a major road near retail tenants like Walmart and Jewel-Osco. US Bank is an investment grade rated tenant, and the lease features annual rent escalations of 2.5% with renewal options. The trade area has a population over 112,000 with above average incomes and a well-educated demographic.
This document provides an offering for the net lease investment of a Walgreens property located at 4580 Monroe Street in Toledo, OH. The 13,125 square foot Walgreens has over 11 years remaining on its absolute triple net lease and is situated at a heavily trafficked intersection with excellent visibility. It is located near hospitals, schools, and retail amenities. Walgreens is the largest drug retail chain in the US and an investment grade rated tenant, offering a long term secure cash flow opportunity.
This document provides an offering for the net lease investment of a single-tenant Natural Grocers property in Clive, Iowa. The 15,000 square foot property has over 14 years remaining on its lease and is occupied by Natural Grocers, a publicly traded specialty retailer experiencing strong sales growth. The property benefits from high traffic visibility along two major arterials near interstate access. Demographic data shows a population of over 85,000 within three miles and an average household income exceeding $92,000 within five miles.
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A presentation providing an overview of FAA enforcement actions directed at US pilots, but with broad information that may be applicable to aviation businesses as well. The presentation includes appendices which support the main body of the presentation.
The Boulder Group’s Research Department has released a new research report providing comprehensive numbers and analysis of the activity in the National Net Lease Medical Market.
The Boulder Group is pleased to exclusively market for sale a recently construction single tenant net lease Walgreens property located in the Chicago MSA
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Brennan, Niamh and Connell, Brenda [2000] Intellectual Capital: Current Issue...Prof Niamh M. Brennan
Substantial differences between company book values and market values indicate the presence of assets not recognised and measured in company balance sheets. Intellectual capital assets account for a substantial proportion of this discrepancy. At present, companies are not required to report on intellectual capital assets which leaves the traditional accounting system ineffective for measuring the true impact of such intangibles.
Regulations currently in place are analysed in this paper. Prior research concerning intellectual capital is next presented. Frameworks for intellectual capital are compared. Indicators used for the measurement of intellectual capital are examined. The research methodologies employed for collecting information about the use of intellectual capital accounts in companies are reviewed.
Guidelines available to companies for reporting on intellectual capital are considered and also the efforts made towards developing an accounting standard for intellectual capital. Finally, current issues and policy implications of accounting for intellectual capital in the future are examined.
This document is a Form 10-K filed by Unisys Corporation with the Securities and Exchange Commission for the fiscal year ending December 31, 2008. It provides an overview of Unisys' business operations, including information on its principal products and services, materials, patents, trademarks, seasonality, customers, backlog, competition, research and development activities, environmental matters, employees, international presence, and executive officers. Key details include that Unisys operates in Services and Technology segments, has over 29,000 employees worldwide, generated 17% of revenue from the US government in 2008, and lists biographies of its top executive officers.
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Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
The document discusses key differences between the provisions for capital gains taxation under the Direct Taxes Code (DTC) and the Income Tax Act (ITA). Some major changes proposed under the DTC include:
1) Discarding the concepts of long-term capital gains and short-term capital gains. Capital gains will be taxed at the same rates as other income.
2) Removing special treatment and exemptions for capital gains that existed under the ITA.
3) Defining "investment asset" and "business capital asset" differently than the ITA defined "capital asset".
4) Providing a more extensive definition of "transfer" compared to the definition in the ITA.
The document discusses implementing a public key infrastructure (PKI) strategy. It outlines various considerations for companies including their security needs, possible implementation options of building or outsourcing their PKI, and the benefits of cross-certification which allows different PKIs to trust each other. The conclusion recommends companies clearly define their identity, regulatory, partnership, and interoperability needs to determine the best PKI approach.
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Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
This document is Micron Technology's annual report (Form 10-K) filed with the SEC for the fiscal year ended August 31, 2006. It provides an overview of Micron, which manufactures DRAM and NAND memory chips as well as CMOS image sensors. In 2006, Micron increased its focus on the growing NAND flash market through a joint venture and acquisition. It also introduced new CMOS image sensor products and saw significant growth in that business. The report discusses Micron's key products, manufacturing process, and business segments of Memory and Imaging.
The document is Micron Technology's annual report (Form 10-K) filed with the SEC for the fiscal year ended August 30, 2007. It provides an overview of Micron, which manufactures DRAM and NAND memory as well as CMOS image sensors. In recent years, Micron has increased its focus on the growing NAND market through joint ventures and acquisitions. The report discusses Micron's key products, manufacturing facilities, and business segments. It aims to inform investors about Micron's business operations and financial performance.
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Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
This document is a registration statement filed with the SEC to register shares of common stock for resale by the selling stockholder, RDW Capital, LLC. The registration statement relates to a securities purchase agreement between Force Protection Video Equipment Corp. and RDW Capital, whereby RDW Capital invested a total of $462,000 in Force Protection through three convertible promissory notes. If RDW Capital elects to convert the notes, up to 2,415,000 shares of common stock would be issuable to RDW Capital. The proceeds from the sale of shares by RDW Capital will be retained by RDW Capital, while Force Protection will bear the costs associated with the registration process.
This document is Western Digital Corporation's annual report and Form 10-K for the fiscal year 2000. It includes the company's annual report, which discusses its businesses in personal storage, networked storage, storage management software, and new ventures. It summarizes the CEO's letter to shareholders, which discusses challenges faced in 2000 including a product recall, efforts to improve efficiency, expansion into new markets, and future opportunities. The Form 10-K filing includes required financial and operational information for investors as required by the Securities and Exchange Commission.
This chapter discusses accounting for intangible assets under IAS 38. The key points are:
- IAS 38 defines criteria for recognizing and initially measuring intangible assets at cost. Research costs are expensed while development costs meeting certain criteria are capitalized.
- Intangible assets are subsequently measured either under the cost model (carried at cost less amortization and impairment) or revaluation model (carried at fair value).
- Intangible assets have either indefinite or finite useful lives. Assets with indefinite lives are not amortized but tested annually for impairment. Assets with finite lives are amortized systematically over their useful lives.
- Disclosures around
This document provides an overview of domestic transfer pricing provisions in India. It discusses key concepts like specified domestic transactions (SDT), related parties, applicable sections like 40A(2) and 80A, documentation requirements, and penalties. SDT includes transactions between related parties exceeding INR 50 million annually. The scope was expanded based on a Supreme Court case suggesting potential for tax arbitrage with losses or differential tax rates. Documentation like functional analysis and economic analysis is required to demonstrate arm's length pricing of SDTs. Non-compliance can lead to disallowance of expenses or income adjustments along with penalties.
This document provides an offering summary for a net lease investment property occupied by US Bank in Lockport, Illinois. US Bank recently signed a 10-year lease extension through 2026 for the 5,250 square foot building on nearly 45,000 square feet of land. The property benefits from its location along a major road near retail tenants like Walmart and Jewel-Osco. US Bank is an investment grade rated tenant, and the lease features annual rent escalations of 2.5% with renewal options. The trade area has a population over 112,000 with above average incomes and a well-educated demographic.
This document provides an offering for the net lease investment of a Walgreens property located at 4580 Monroe Street in Toledo, OH. The 13,125 square foot Walgreens has over 11 years remaining on its absolute triple net lease and is situated at a heavily trafficked intersection with excellent visibility. It is located near hospitals, schools, and retail amenities. Walgreens is the largest drug retail chain in the US and an investment grade rated tenant, offering a long term secure cash flow opportunity.
This document provides an offering for the net lease investment of a single-tenant Natural Grocers property in Clive, Iowa. The 15,000 square foot property has over 14 years remaining on its lease and is occupied by Natural Grocers, a publicly traded specialty retailer experiencing strong sales growth. The property benefits from high traffic visibility along two major arterials near interstate access. Demographic data shows a population of over 85,000 within three miles and an average household income exceeding $92,000 within five miles.
Overview of FAA enforcement actions.July 2012Peyton Robinson
A presentation providing an overview of FAA enforcement actions directed at US pilots, but with broad information that may be applicable to aviation businesses as well. The presentation includes appendices which support the main body of the presentation.
The Boulder Group’s Research Department has released a new research report providing comprehensive numbers and analysis of the activity in the National Net Lease Medical Market.
The Boulder Group is pleased to exclusively market for sale a recently construction single tenant net lease Walgreens property located in the Chicago MSA
Transfer pricing: intercompany alignment of intangible propertyEY
This session will explore the transfer pricing aspects of research and development activities and the types of alignment strategies that are available to enable efficient ip structures.
Brennan, Niamh and Connell, Brenda [2000] Intellectual Capital: Current Issue...Prof Niamh M. Brennan
Substantial differences between company book values and market values indicate the presence of assets not recognised and measured in company balance sheets. Intellectual capital assets account for a substantial proportion of this discrepancy. At present, companies are not required to report on intellectual capital assets which leaves the traditional accounting system ineffective for measuring the true impact of such intangibles.
Regulations currently in place are analysed in this paper. Prior research concerning intellectual capital is next presented. Frameworks for intellectual capital are compared. Indicators used for the measurement of intellectual capital are examined. The research methodologies employed for collecting information about the use of intellectual capital accounts in companies are reviewed.
Guidelines available to companies for reporting on intellectual capital are considered and also the efforts made towards developing an accounting standard for intellectual capital. Finally, current issues and policy implications of accounting for intellectual capital in the future are examined.
This document is a Form 10-K filed by Unisys Corporation with the Securities and Exchange Commission for the fiscal year ending December 31, 2008. It provides an overview of Unisys' business operations, including information on its principal products and services, materials, patents, trademarks, seasonality, customers, backlog, competition, research and development activities, environmental matters, employees, international presence, and executive officers. Key details include that Unisys operates in Services and Technology segments, has over 29,000 employees worldwide, generated 17% of revenue from the US government in 2008, and lists biographies of its top executive officers.
Government Contracting - DFARS Part 253 - Forms - Win Federal ContractsJSchaus & Associates
Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
The document discusses key differences between the provisions for capital gains taxation under the Direct Taxes Code (DTC) and the Income Tax Act (ITA). Some major changes proposed under the DTC include:
1) Discarding the concepts of long-term capital gains and short-term capital gains. Capital gains will be taxed at the same rates as other income.
2) Removing special treatment and exemptions for capital gains that existed under the ITA.
3) Defining "investment asset" and "business capital asset" differently than the ITA defined "capital asset".
4) Providing a more extensive definition of "transfer" compared to the definition in the ITA.
The document discusses implementing a public key infrastructure (PKI) strategy. It outlines various considerations for companies including their security needs, possible implementation options of building or outsourcing their PKI, and the benefits of cross-certification which allows different PKIs to trust each other. The conclusion recommends companies clearly define their identity, regulatory, partnership, and interoperability needs to determine the best PKI approach.
Government Contracting - DFARS Part 252 - Clauses - Win Federal ContractsJSchaus & Associates
Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
This document is Micron Technology's annual report (Form 10-K) filed with the SEC for the fiscal year ended August 31, 2006. It provides an overview of Micron, which manufactures DRAM and NAND memory chips as well as CMOS image sensors. In 2006, Micron increased its focus on the growing NAND flash market through a joint venture and acquisition. It also introduced new CMOS image sensor products and saw significant growth in that business. The report discusses Micron's key products, manufacturing process, and business segments of Memory and Imaging.
The document is Micron Technology's annual report (Form 10-K) filed with the SEC for the fiscal year ended August 30, 2007. It provides an overview of Micron, which manufactures DRAM and NAND memory as well as CMOS image sensors. In recent years, Micron has increased its focus on the growing NAND market through joint ventures and acquisitions. The report discusses Micron's key products, manufacturing facilities, and business segments. It aims to inform investors about Micron's business operations and financial performance.
Government Contracting - DFARS Part 250 - Extraordinary Contractual Actions -...JSchaus & Associates
Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
This document is a registration statement filed with the SEC to register shares of common stock for resale by the selling stockholder, RDW Capital, LLC. The registration statement relates to a securities purchase agreement between Force Protection Video Equipment Corp. and RDW Capital, whereby RDW Capital invested a total of $462,000 in Force Protection through three convertible promissory notes. If RDW Capital elects to convert the notes, up to 2,415,000 shares of common stock would be issuable to RDW Capital. The proceeds from the sale of shares by RDW Capital will be retained by RDW Capital, while Force Protection will bear the costs associated with the registration process.
This document is Western Digital Corporation's annual report and Form 10-K for the fiscal year 2000. It includes the company's annual report, which discusses its businesses in personal storage, networked storage, storage management software, and new ventures. It summarizes the CEO's letter to shareholders, which discusses challenges faced in 2000 including a product recall, efforts to improve efficiency, expansion into new markets, and future opportunities. The Form 10-K filing includes required financial and operational information for investors as required by the Securities and Exchange Commission.
This chapter discusses accounting for intangible assets under IAS 38. The key points are:
- IAS 38 defines criteria for recognizing and initially measuring intangible assets at cost. Research costs are expensed while development costs meeting certain criteria are capitalized.
- Intangible assets are subsequently measured either under the cost model (carried at cost less amortization and impairment) or revaluation model (carried at fair value).
- Intangible assets have either indefinite or finite useful lives. Assets with indefinite lives are not amortized but tested annually for impairment. Assets with finite lives are amortized systematically over their useful lives.
- Disclosures around
This document provides an overview of domestic transfer pricing provisions in India. It discusses key concepts like specified domestic transactions (SDT), related parties, applicable sections like 40A(2) and 80A, documentation requirements, and penalties. SDT includes transactions between related parties exceeding INR 50 million annually. The scope was expanded based on a Supreme Court case suggesting potential for tax arbitrage with losses or differential tax rates. Documentation like functional analysis and economic analysis is required to demonstrate arm's length pricing of SDTs. Non-compliance can lead to disallowance of expenses or income adjustments along with penalties.
This document is Forgent Networks' annual report (Form 10-K) filed with the SEC for the fiscal year ending July 31, 2003. It provides an overview of the company's business operations, including that it provides enterprise meeting automation software and professional services, and generates licensing revenues from its patent portfolio. In fiscal year 2003, Forgent transformed its business by growing revenues over 61%, launching a new software suite, divesting its hardware business, and strengthening its financial position. However, uncertainties remain in the challenging economic environment.
Escrow document transfer disclosures in Californiamarkpetrie1
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Please join Jennifer Schaus & Associates every Wednesday in 2021 for a complimentary Wednesday series. See the full recording on our YouTube Channel (coming soon). For more information about our federal contracting services please visit http://www.Jenniferschaus.com or contact us at 202-365-0598. Win more federal government contracts!
- The document is a Form 10-K annual report filed by Unisys Corporation with the US Securities and Exchange Commission for the fiscal year ending December 31, 2006.
- Unisys operates two business segments - Services and Technology. The Services segment provides consulting, outsourcing, and other services, while the Technology segment develops servers and related products.
- As of December 31, 2006 Unisys had approximately 31,500 employees and major facilities around the world, including 21 in the US and 23 outside the US. No single customer accounted for over 10% of revenue.
This document is Celanese Corporation's 2004 annual report. It summarizes the company's performance in 2004, including:
1) Celanese recorded strong underlying results and made strategic moves to sustain earnings growth, including becoming a U.S.-headquartered company and investing in China and other markets.
2) The company strengthened its core businesses, extended them into higher-value products, and became leaner by investing in products/capacities and restructuring underperforming units.
3) Specific strategic actions in 2004 included acquisitions, expanding capacities, consolidating facilities, and approving portfolio changes to optimize business performance.
Similar to Analyzing Intangibles.Cite Slc.May 7 2012 (20)
1. The Judge Building
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(801) 746-6300 (Office)
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www.lhwplaw.com
Analyzing the Intercompany
Transfers of Intangible Property
Council for International Tax Education
May 7, 2012 Peyton H. Robinson
The Grand America Hotel (801) 746-6300
Salt Lake City, UT probinson@lhwplaw.com
2. Notice
► These slides are for educational and discussion purposes
only.
► Any US tax advice contained herein was not intended
or written to be used, and cannot be used, for the purpose
of avoiding penalties that may be imposed under the
Internal Revenue Code or applicable state or local tax
law provisions.
Page 2 Analyzing the Intercompany Transfers of Intangible Property
3. Agenda
► What is “intangible property”?
► How does it interact with IRC § 197 and § 367(d)?
► What is the significance of the legal owner?
► What transfer pricing methods are available?
► Focus on the CUT, CPM, and profit split methods
► Analytical example involving intangible property
Page 3 Analyzing the Intercompany Transfers of Intangible Property
4. Potential Goals of Intangible Property
Management
► Place income related to the IP in low tax jurisdiction
► Reduce effective tax rate
► Increase earnings per share
► Integrate tax and business strategies
► Intellectual asset management
► Risk management
► Enhance ROI on process re-engineering
Page 4 Analyzing the Intercompany Transfers of Intangible Property
5. IP management – Methods and
Techniques
► Existing intangibles
► Sale or license = § 482
► Contribution = § 367(d)
► § 1031 exchange (see § 1.482-1(f)(1)(iii) and PLR 9222005)
► Developing intangibles
► Cost sharing (with/without contributions, options)
► Contract R&D, marketing services
► Acquired intangibles
► Initial ownership
Page 5 Analyzing the Intercompany Transfers of Intangible Property
6. What is
Intangible Property?
Page 6 Analyzing the Intercompany Transfers of Intangible Property
7. What is Intangible Property and Why Does
it Matter?
► Definitions matter – determines if the rules apply and how
► Core question: Is the intangible property subject to § 482?
► IRC § 482: In the case of any transfer (or license) of
intangible property (within the meaning of § 936(h)(3)(B)),
the income with respect to such transfer or license shall
be commensurate with the income attributable to the
intangible.
► CWI Standard
► Reference to IRC § 936
Page 7 Analyzing the Intercompany Transfers of Intangible Property
8. IRC § 936 – Puerto Rico and Possession
Tax Credit
► Definition of intangible property in § 936(h)(3)(B):
► The term "intangible property" means any--
(i) patent, invention, formula, process, design, pattern, or know-how;
(ii) copyright, literary, musical, or artistic composition;
(iii) trademark, trade name, or brand name;
(iv) franchise, license, or contract;
(v) method, program, system, procedure, campaign, survey, study,
forecast, estimate, customer list, or technical data; or
(vi) any similar item,
which has substantial value independent of the services of any individual.
► References to § 936 in §§ 482 and 367
► § 367(a) – transfer of property from the US
► § 367(d) – special rules for transfers of intangible property
Page 8 Analyzing the Intercompany Transfers of Intangible Property
9. Intangible Property Under IRC § 482
Regulations
► Treas. Reg. § 1.482-4(b):
(b) Definition of intangible. For purposes of § 482, an intangible is an asset that
comprises any of the following items and has substantial value independent of the
services of any individual –
(1) Patents, inventions, formulae, processes, designs, patterns, or know-how;
(2) Copyrights and literary, musical, or artistic compositions;
(3) Trademarks, trade names, or brand names;
(4) Franchises, licenses, or contracts;
(5) Methods, programs, systems, procedures, campaigns, surveys, studies, forecasts,
estimates, customer lists, or technical data; and
(6) Other similar items. For purposes of § 482, an item is considered similar to those
listed in paragraph (b)(1) through (5) of this section if it derives its value not from its
physical attributes but from its intellectual content or other intangible properties.
► Nearly identical to § 936
Page 9 Analyzing the Intercompany Transfers of Intangible Property
10. Intangible Property Under IRC § 367
Regulations
► Treas. Reg. § 1.367(a)-1T(d)(5)(i):
► For purposes of § 367 and regulations thereunder, the term
"intangible property" means knowledge, rights, documents, and
any other intangible item within the meaning of § 936(h)(3)(B) that
constitutes property for purposes of §§ 332, 351, 354, 355, 356, or
361, as applicable.
► Treas. Reg. § 1.367(d)-1T(b):
► § 367(d) and the rules of this section shall apply to the transfer of
any intangible property, as defined in § 1.367(a)-1T(d)(5)(i).
Page 10 Analyzing the Intercompany Transfers of Intangible Property
11. Joint Committee on Taxation Report from
July 2010
► JCT report on “Present Law and Background Related to
Possible Income Shifting and Transfer Pricing” states:
► Both §§ 367(d) and 482 incorporate by reference the definition of
intangible property in § 936(h)(3)(B). Because they are not
specifically mentioned in § 936(h), whether goodwill, going
concern value and workforce in place are intangible property for
which compensation must be provided is unsettled. The IRS has
taken the position that any workforce in place, goodwill and going
concern value are within the scope of intangible property under
§ 936(h)(3)(B), because they constitute "similar items" under
§ 936(h)(3)(B)(vi).
Page 11 Analyzing the Intercompany Transfers of Intangible Property
12. Amortizable § 197 Intangibles
► § 197 provides for amortization of goodwill and certain
other intangibles.....“any amortizable section 197
intangible”
► Much broader definition than § 936, including
(i) goodwill and going concern value,
(ii) workforce in place,
(iii) business books and records, operating systems, or any other
information base,
(iv) any license, permit, or other right granted by a governmental unit ,
(v) any covenant not to compete (with some limitations),
(vi) “customer-based intangibles” and “supplier-based intangibles” which
are generally those acquired through relationships, but can include
“market share” as well as value from goods or services to be provided.
Page 12 Analyzing the Intercompany Transfers of Intangible Property
13. IRC § 197 Intangibles (continued)
► § 197 provides for amortization of goodwill, going concern
value, and workforce in place
► Defined in Treas. Reg. § 1.197-2(b)(1) – (3);
(1) Goodwill is the value of a trade or business attributable to the
expectancy of continued customer patronage. This expectancy may be
due to the name or reputation of a trade or business or any other factor.
(2) Going concern value is the additional value that attaches to property by
reason of its existence as an integral part of an ongoing business activity.
(3) Workforce in place includes the composition of a workforce (for
example, the experience, education, or training of a workforce), the terms
and conditions of employment whether contractual or otherwise, and any
other value placed on employees or any of their attributes.
Page 13 Analyzing the Intercompany Transfers of Intangible Property
14. IRS Viewpoint of the Definition of
Intangibles
► The IRS cost sharing regulations (§ 1.482-7) issued in
final form December 2011, and effective in temporary
form from January 2009, make it clear that workforce in
place, goodwill, and going concern value may be
compensable intangibles depending on the facts.
► See Veritas Software Corp. v. Comm’r, 133 T.C. 297 (2009),
nonacq., AOD 2010-49 (Dec. 6, 2010), in which the IRS
pursued adjustments related to a “buy-in” payment for
contributed intangibles, including workforce in place,
goodwill, and going concern value.
► IRS not acquiesce – clarification of law and not new position
► Same broad view of intangibles generally under § 1.482-4
Page 14 Analyzing the Intercompany Transfers of Intangible Property
15. Interaction with
IRC §367(d)
Page 15 Analyzing the Intercompany Transfers of Intangible Property
16. Interaction with IRC § 367(d)
► Where a taxpayer transfers an intangible to a foreign
related party, § 482 generally applies instead of § 367(d)
► Treas. Reg. § 1.367(d)-1T(g)(4)(i) –
► § 367(d) shall not apply in the case of an actual sale or license of
intangible property by a US person to a foreign corporation.
► If an adjustment is made, it must be analyzed under § 482.
► However, if a US person transfers intangible property to a related
foreign corporation without consideration, or in exchange for stock or
securities of the transferee in a §§ 351 or 361 transaction, then no sale
or license subject to adjustment under § 482 is deemed to have
occurred. Instead, the US person is treated as having made a transfer
of the intangible property that is subject to § 367(d).
► IRS can disregard the sale or license and treat the transaction as a
sham if the economic substance does not fit the terms – in which
case § 367(d) applies
Page 16 Analyzing the Intercompany Transfers of Intangible Property
17. Practical Effect if § 367(d) Applies
► The transfer of an intangible is treated as a sale for
payments contingent on the productivity or use over the
useful life of the intangible (regardless of whether in fact
such payments are made).
► In general, deemed annual license payments will continue
if a transfer is made to a related person, while gain must
be recognized immediately if the transfer is to an
unrelated person.
► The terms of the purported sale of license will be
determined by the actual practice of the parties and the
surrounding facts and circumstances.
► § 482 principles may still be used (e.g., valuation).
Page 17 Analyzing the Intercompany Transfers of Intangible Property
18. Practical Effect if § 367(d) Applies
(continued)
► FSA 200023014 (Feb. 29, 2000), fn. 26:
► Additionally, we note that § 367(d) would not generally apply in the case
of an express sale or license of intangible property by a US person to a
foreign corporation.….[see the] White Paper, A Study of Intercompany
Pricing under § 482 of the Code, 1988-2 C.B. 458, 473, stating “The
commensurate with income standard treats related party transfers of
intangibles as if an intangible had been transferred for a license payment
that reflects the intangible's value throughout its useful life, a result similar
to section 367(d) . . . . [A] license payment that is less than some specific
percentage of the appropriate arm's length amount could be considered
so devoid of economic substance that the arm's length charge should be
subject to section 367(d). Thus, those related party transfers which
deviate substantially from the proper commensurate with income payment
would be subject to 367(d), even if cast in the form of a sale or license.”
Page 18 Analyzing the Intercompany Transfers of Intangible Property
19. Significance of
the Legal Owner
Page 19 Analyzing the Intercompany Transfers of Intangible Property
20. Significance of the Legal Owner of the
Intangible
► Situation: If foreign parent develops a valuable product
and licenses its US distributor to sell and market it, under
what circumstances would US distributor be entitled to
profits from the sale of the product beyond what a
“routine” distributor would make?
► What if US distributor develops the customer lists,
establishes a monopoly in a niche market, or contributes
to the further development of the next generation product?
► Who is the economic owner of the intangible as compared
to the legal owner?
► Is there really more than one intangible?
Page 20 Analyzing the Intercompany Transfers of Intangible Property
21. Historical View of Legal v. Economic
Ownership
► 1968 regulations (“developer-assister” rules)
► The determination as to which member of a group of related
entities is the developer and which members of the group are
rendering assistance to the developer in connection with its
development activities shall be based on all the facts and
circumstances of the individual case.
► Ignoring legal ownership in favor of an economic approach
► 1994 regulations and “cheese examples”
► Legal owner ordinarily considered the owner for § 482 purposes
► However, examples suggested long term distribution contract with
exclusive rights could lead to economic ownership of intangibles
Page 21 Analyzing the Intercompany Transfers of Intangible Property
22. Present US Regulations – § 1.482-4
► Treas. Reg. § 1.482-4(f)(3)(i)(A):
► The legal owner of intangible property pursuant to the intellectual
property law of the relevant jurisdiction, or the holder of rights
constituting an intangible property pursuant to contractual terms
(such as the terms of a license) or other legal provision, will be
considered the sole owner of the respective intangible property for
purposes of this section unless such ownership is inconsistent with
the economic substance of the underlying transactions….[If no
legal owner is identified] then the controlled taxpayer who has
control of the intangible property, based on all the facts and
circumstances, will be considered the sole owner of the intangible
property for purposes of this section.
► Treas. Reg. § 1.482-1(d)(3)(ii)(B)(1) – written terms
respected if consistent with the economic substance
Page 22 Analyzing the Intercompany Transfers of Intangible Property
23. Present US Regulations – § 1.482-4
(continued)
► Examples:
► If FP licenses its US registered trademark to US Sub with
exclusive rights to manufacture and market products in the US
under the trademark, then FP is the owner of the trademark
pursuant to IP law, and US Sub is the owner of the license.
► Factor: a license is considered a separate intangible under § 482
► If FP provides US Sub rights to distribute a product in the US, and
US Sub develops a valuable customer list, unless the customer list
ownership is specified in the distribution agreement, US Sub may
be considered the owner of the list.
► Factor: US Sub has practical control over the customer list use and
dissemination
► GlaxoSmithKline & marketing intangibles (settled 2006)
Page 23 Analyzing the Intercompany Transfers of Intangible Property
24. Transfer Pricing
Methods
Page 24 Analyzing the Intercompany Transfers of Intangible Property
25. Transfer Pricing Methods Under § 482
► Treas. Reg. § 1.482-4 specifies four methods to
determine the arm’s length transfer price in connection
with the transfer of the right to use (but not outright
ownership) of intangibles:
► The comparable uncontrolled transaction method (CUT)
► Used in cases where comparable data (comparable intangible, comparable
circumstances) is available
► The comparable profits method (CPM)
► Typically used to test the less complex entity for determination of a royalty rate by
applying a routine return to the licensee (where one party owns IP)
► The profit split method (PSM)
► Used in cases where both parties own nonroutine intangibles
► Unspecified methods
Page 25 Analyzing the Intercompany Transfers of Intangible Property
26. CUT Method – Treas. Reg. § 1.482-4(c)
► General approach:
► The owner of intangible property – e.g., trademark, trade name,
patent, manufacturing know-how, customer list, etc. – licenses it to
a related party. How does the owner decide what the appropriate
license rate should be, as well as how to apply it?
► Comparable license agreements = > CUTs
► The comparable uncontrolled transaction method evaluates
whether the amount charged for a controlled transfer of intangible
property was arm's length by reference to the amount charged in a
comparable uncontrolled transaction.
Page 26 Analyzing the Intercompany Transfers of Intangible Property
27. CUT Method (continued)
► As with the CUP Method used in tangible property
transactions, comparability is a major factor in the ability
to use the CUT Method.
► If an uncontrolled transaction involves the transfer of the
same intangible under the same, or substantially the
same, circumstances as the controlled transaction, the
results derived from applying the CUT Method will
generally be the most direct and reliable measure of the
arm's length result for the controlled transfer of an
intangible.
► Preference for CUT over CPM or PSM
Page 27 Analyzing the Intercompany Transfers of Intangible Property
28. CUT Method (continued)
► Ideal CUT would be where the owner of the IP licenses
the same intangible to both related and unrelated parties
on the same terms, during the same time period, and has
written agreements and other supporting data showing the
agreement terms have been followed in both cases.
► This is an internal CUT
► The method can also be applied using external CUTs –
where comparable license agreements are used to
develop a range of license rates and other terms.
► Interquartile range frequently used with external CUTs
Page 28 Analyzing the Intercompany Transfers of Intangible Property
29. CUT Method – Comparability
► Comparability factors of Treas. Reg. § 1.482-4(c)(2)(iii)
► Involve similar products or processes within the same general
industry or market
► Have similar profit potential (often very difficult to know)
► Involve comparable circumstances – considerations…
► Rights granted (e.g., exclusive or non-exclusive)
► Geographic area involved
► Stage of development of the intangibles
► Rights to receive updates
► Uniqueness of the IP, including degree of legal protections
► Duration of the license and any termination rights
► Risks to be assumed by the transferee
► Any collateral relationships or transactions between the parties
► Any functions to be performed by the parties (e.g., services)
Page 29 Analyzing the Intercompany Transfers of Intangible Property
30. CUT Method – Interquartile Range
► Treas. Reg. § 1.482-4(c)(3) specifically acknowledges the
use of an interquartile range in the CUT Method
► Example: P licenses to Sub rights to use IP, but does not
license the same IP to unrelated parties
► A search may be performed to Observation Royalty rates
1 2.0%
identify third party licensing
2 3.5%
agreements, with consideration of
3 4.0%
the comparability factors
4 7.0%
► If 10 comparable licenses were
5 8.0%
identified, then an IQR could be
6 8.0%
constructed that would include the
7 10.0%
3rd and 8th observations
8 12.0%
► Arm’s length royalty rate would
9 12.5%
be between 4.0% and 12.0%
10 15.0%
Page 30 Analyzing the Intercompany Transfers of Intangible Property
31. Comparable Profits Method (CPM)
► CPM may be used to evaluate the licensing of intangible
property (Treas. Reg. § 1.482-4(a)(2) refers to –5 reg.)
► Review core concepts of CPM
► Tested party
► Profit level indicators
► Comparable public companies
► Comparability adjustments
► Arm’s length range – IQR
► Use of multi-year data
► Adjustments to the median when out of the range
Page 31 Analyzing the Intercompany Transfers of Intangible Property
32. CPM (continued)
► No specific profit level indicator applies
► Operating margin, return on assets, or other appropriate PLI
► CPM typically used as an “excess profits method” for IP license
► Example: Parent licenses manufacturing know-how and related
processes to its foreign subsidiary, ManuCo, which pays a royalty
to P for the intangibles.
► If ManuCo is the least complex of the entities and has none of its own
nonroutine IP, it may be the tested party for the CPM (e.g., a contract
manufacturer).
► ManuCo could be tested using a return on assets.
► ManuCo could pay a royalty to Parent of X% of sales to the extent
ManuCo was within the IQR of the ROA – assume the bottom of the
range was a 4% ROA, then the royalty could not be such to put
ManuCo below the range, or an adjustment may be required.
► See Treas. Reg. § 1.482-5(e), Example 4
Page 32 Analyzing the Intercompany Transfers of Intangible Property
33. Profit Split Method (PSM)
► Treas. Reg. § 1.482-4(a)(3) refers to –6 reg.
► The PSM evaluates whether the allocation of the
combined operating profit or loss attributable to one or
more controlled transactions is arm's length by reference
to the relative value of each controlled taxpayer's
contribution to that combined operating profit or loss.
► Two types of PSMs
► Comparable PSM
► Residual PSM
Page 33 Analyzing the Intercompany Transfers of Intangible Property
34. PSM (continued)
► Comparable PSM is rarely used because data on how
unrelated parties split profits or losses is generally not
publicly available.
► Primary problem with the types of intangibles involved and
comparability to the transactions being evaluated
► Identification of how relative shares were decided not disclosed
► Residual PSM the primary method when PSM used
► Provides for a “routine” return for functions performed, with the
residual profit or loss being split according to the parties’ relative
value of their nonroutine contributions to the combined profit (or
loss)
► Nonroutine contributions may be valued using external
benchmarks (e.g., relative sales) or internal benchmarks (e.g.,
relative capitalized cost of intangible development)
Page 34 Analyzing the Intercompany Transfers of Intangible Property
35. Residual PSM Example
► US Co and UK Co were both independent companies in
the same industry for many years and developed their
own products using their own unique intangibles.
► Both companies have ongoing R&D for their products.
► US Co acquires UK Co, and they begin sharing R&D
knowledge and resources.
► They combine their sales and manufacturing activities.
► They become a global company under the US Co brand.
► Transactions between the US and UK may be evaluated
using the residual PSM.
► Transactions include shared R&D, manufacturing, shared
services, and each company sells the other’s products.
Page 35 Analyzing the Intercompany Transfers of Intangible Property
36. Residual PSM Example (continued)
► In the first step of the RPSM, each party is given a return
for its routine functions.
► Sales functions earn a “distribution” return using the CPM and an
operating margin PLI.
► Services that each party performs for the other party are given a
routine return using the cost of services plus method under Treas.
Reg. § 1.482-9.
► Manufacturing functions performed by each side earn a return
based on the CPM and a return on assets PLI.
► In the second step, after each narrowly identified routine
function is remunerated, the residual is shared according
to each parties’ relative R&D spend over the past 5 years
(based on the life of developed intangibles).
Page 36 Analyzing the Intercompany Transfers of Intangible Property
38. Analytical Example – Background
► US Distributor sells products in the US that were
developed by its Japan Parent Company, and
manufactured by Parent’s Hong Kong contract
manufacturer.
► Year One: US Distributor buys products from Parent
► Parent takes flash title from Hong Kong and on-sells to US
► US Distributor gets a routine distribution return – CPM, OM PLI
► Year Two: For business efficiency reasons, Japan Parent
directs Hong Kong to sell directly to US Distributor.
► Cost of product to US Distributor drops significantly
► US Distributor pays a royalty to Japan Parent
► Question: How to evaluate royalty to Parent in Year Two?
Page 38 Analyzing the Intercompany Transfers of Intangible Property
39. US Company Distributes for Japan Parent –
Tangible Property Transaction (Year One)
Transaction Flow in Year One
US Distribution Company
Payment for tangible property and all
Tangible property from Japan Parent along with
intangible property rights from Parent
all intangible property rights from Parent
Tangible property
Japan Parent Company Hong Kong Contract
(and owner of all IP) Manufacturer
Rights and
Japan Parent grants Hong Kong rights payment for
Hong Kong earns modest return on
to manufacture product according to tangible property
contract manufacturing function
Parent specifications, and rights to sell
tangible products to Parent only.
Parent provides Hong Kong
manufacturing know-how and
processes.
Page 39 Analyzing the Intercompany Transfers of Intangible Property
40. US Company Distributes for Japan Parent –
Intangible Property Transaction (Year Two)
Transaction Change in Year Two
Payment for intangible property rights
from Parent separate from those
granted to Hong Kong – including (1) US Distribution Company
rights to distribute products that embody
Parents ’s patented technologies, (2)
rights to physically modify the products,
(3) rights to modify the integral
Tangible property with
software, (4) rights to access trade
embedded IP related to
names, trademarks, designs, patterns,
manufacturing know-how
methods, systems, technical data, and
and processes.
other materials, and (5) rights to provide Payment Payment
aftermarket services on Parent’s
products to end customers.
Payment
Japan Parent Company Hong Kong Contract
(and owner of all IP) Manufacturer
Rights
Japan Parent grants Hong Kong rights to Hong Kong to have a full cost
manufacture products according to Parent markup of 3.0% to 5.0% for
specifications, and rights to sell tangible contract manufacturing.
product to affiliates anywhere in the world.
Parent provides Hong Kong with
manufacturing know-how and processes.
Page 40 Analyzing the Intercompany Transfers of Intangible Property
41. Analytical Example – Conclusion
► Problem: Tangible property transactions generally have embedded
intangibles in the price of the product, but where contract
manufacturer is selling Parent’s products to US, has a separation of
tangible and intangible property occurred?
► US Distributor’s functions in Year Two have not changed
► Still selling Japan Parent’s products in the US
► Solution is to separately identify what intangible transactions are
actually occurring – what valuable IP from Japan Parent is US
Distributor using in Year Two?
► CPM may be used for both tangible and intangible property
transactions
► Payment to Japan Parent by US Distributor recharacterized as royalty
rather than payment for tangible property
► US Distributor as tested party still given routine return – CPM, OM PLI
Page 41 Analyzing the Intercompany Transfers of Intangible Property