PATENT COSTS AND THE TAX CODE
 Deductibility as Research and Development Costs.
If you are engaged in a trade or business, then the costs you incur for
attorney fees to obtain a patent may be deductible in the year they are
incurred.
IRS Regulations. Attorneys' fees expended
in making and perfecting a patent application are deductible "research
or experimental expenditures" under section 174 of the Internal
Revenue Code, according to IRS
regulation 26 CFR § 1.174-2. More specifically, IRS 26 CFR §
1.74-1 permits research and development expenditures, which include
attorney fee expenditures, to be treated as expenses
not chargeable to a capital account and deducted in the year in which they
are paid or incurred, or, at the option of the taxpayer, they may be
deferred and amortized.
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