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Trademarks, trade names, brand names, and other similar
items are treated as intangible property and are covered by
section 1.482-2(d),Income Tax Regs. (1968), which deals with the
transfer or use of intangible property. Section 1.482-
2(d)(2)(ii), Income Tax Regs., provides the general rule that, in
determining “the amount of an arm’s length consideration, the
standard to be applied is the amount that would have been paid by
an unrelated party for the same intangible property under the
same circumstances.” The regulation goes on to enumerate the
following factors that may be considered in arriving at the
amount of the arm’s-length consideration:
(a) The prevailing rates in the same industry or
for similar property,
(b) The offers of competing transferors or the bids of
competing transferees,
(c) The terms of the transfer, including limitations on
the geographic area covered and the exclusive or
nonexclusive character of any rights granted,
(d) The uniqueness of the property and the period for
which it is likely to remain unique,
(e) The degree and duration of protection afforded to
the property under the laws of the relevant countries,
(f) Value of services rendered by the transferor to the
transferee in connection with the transfer within the
meaning of paragraph (b)(8) of this section,
(g) Prospective profits to be realized or costs to be
saved by the transferee through its use or subsequent
transfer of the property,
(h) The capital investment and starting up expenses
required of the transferee,
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