Better to Give Than to Receive: Evaluating Recent IP Donation Tax Policy Changes

By: Don Macbean

Over the past decade, charitable contributions of intellectual property have grown rapidly. This growth has coincided with tremendous abuse as firms have sought inflated valuations of donated intellectual property in order to claim larger tax deductions. In 2004, Congress responded by passing section 882 of the American Jobs Creation Act, which drastically changed the rules governing donations of intellectual property. This iBrief argues that Congress, in addressing overvalued intellectual property donations, went too far in its efforts by failing to fully consider the importance of positive donor incentives. After discussing other proposed policies, this iBrief suggests a hybrid policy that combines strong donor incentives with protective measures against overvaluation.

Cite: 2005 Duke L. & Tech. Rev. 0019

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