IP & Royalties strategies

10 plays in this category. Each one covers the mechanics, who it fits, and the estimated impact — then generates a deep dive against your own numbers.

• IP & Royalties

  IP Holding Company in Nevada / Delaware (State Tax Play)

  Move trademarks/patents to NV/DE holdco, license back to opco, deduct royalties at state level.

  5–10% state tax rate applied to royalty base
• IP & Royalties

  §1235 Patent Sale — Long-Term Cap Gains Treatment

  Individual inventor selling patent gets LTCG treatment regardless of holding period.

  20–37% ordinary rate → 15–20% LTCG on patent sale
• IP & Royalties

  Music Publishing / Royalty Portfolio Acquisition

  Buy music catalogs at 8–15x annual royalties — 6–12% cash yield + upside.

  6–12% cash yield + upside vs 5% bonds
• IP & Royalties

  Royalty Securitization (Bowie Bond Model)

  Sell forward-flow of your royalties for a lump sum — David Bowie's original playbook.

  Immediate 6–10x annual royalty as lump sum
• IP & Royalties

  License Your Trademark to Your Own Opco (Royalty Deduction)

  Own your brand personally, license to your C-corp for arms-length royalty.

  Convert 21%+ C-corp income into personal royalty at lower net rate
• IP & Royalties

  §174 R&D Amortization Planning (Post-TCJA)

  TCJA forces 5-yr (US) / 15-yr (foreign) amortization of R&D — plan expense timing carefully.

  Cash-flow acceleration + optimization of §41 credit
• IP & Royalties

  §41 R&D Tax Credit (Federal + State)

  Get 6–14% credit on qualified R&D wages, supplies, contract research — plus state credit stack.

  $25K–$500K/yr federal + state R&D credit
• IP & Royalties

  §1253 Franchise Transfers (Cap-Gain vs Ordinary Nuance)

  Sell franchise rights: retained significant power = ordinary income; full transfer = cap gains.

  Ordinary (37%) → cap gains (20%) on multi-million franchise sale
• IP & Royalties

  IP Cost-Sharing Agreement (Transfer Pricing Play)

  Cost-share IP dev between US parent + foreign sub — future IP owned by low-tax jurisdiction.

  Long-term reduction in effective global tax rate on IP profits
• IP & Royalties

  Purchase Companies with NOLs to Shelter IP Income

  Buy dormant C-corp with §382-preserved NOLs — deploy them against your IP royalty stream.

  Shelter $200K–$5M/yr of royalty income