IRS Releases Final Rules On Sales-Based Royalties

Law360, New York (January 10, 2014, 2:04 PM EST) -- Taxpayers who capitalize their sales-based royalties can now allocate the royalties between property they've sold and their ending inventory instead of solely allocating the royalties toward sold property, under final regulations released Friday by the Internal Revenue Service.

The regulations, which are scheduled to be published in Monday's Federal Register, supplant proposed regulations that were issued in 2010. The earlier proposal had required that capitalized royalties be allocated to property that has been sold or, in the case of inventory property, that has been deemed to...
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