Cleveland partner Alex Szilvas and associate Christina Novotny co-authored an article, "IRS Reverses Position on Like-Kind Exchanges of Certain Intangibles, Creating Opportunities for Business Swaps and Intellectual Property Assets," which was published in the November 24, 2009, Bureau of National Affairs' Daily Tax Report.
According to Szilvas and Novotny, "the Internal Revenue Service recently reversed its long-standing position that intangibles such as trademarks, trade names, mastheads, and customer-based intangibles could not qualify as likekind property under Section 1031 of the Internal Revenue Code. Treasury regulations currently prohibit taxpayers from treating a business’s goodwill or going concern value as like-kind property under Section 1031. Prior to the release of Chief Counsel Advice 200911006, IRS had consistently stated that trademarks, trade names, mastheads, and customer-based intangibles were too closely related to goodwill or going concern value to be treated any differently. CCA 200911006, however, reverses that position."
The article goes on to summarize the "IRS's change in position with respect to these intangibles and briefly discuss some new tax planning opportunities that could be available to taxpayers in light of this change."
Click to read the full article, courtesy of BNA's Daily Tax Report.