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.

This file last modified 07/09/11.
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