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adoption of section 1235. The Commissioner concluded that
consistent with the legislative history and section 1.1235-1(b),
Income Tax Regs.:
it is the position of the Service that where holders
make transfers of patents that do not meet the
requirements for capital gains treatment under section
1235 of the Code, the tax consequences of such
transfers will be determined under other sections of
the Code.
* * * * * * *
Therefore, the mere fact that a patent transfer by
a holder for contingent amounts does not qualify for
long-term capital gains treatment under section 1235 of
the Code, will not prevent it from qualifying for such
treatment under other provisions of the Code if it
would qualify for such treatment in the absence of
section 1235. * * * To the extent that the rationale
of the court in the Poole case may be construed as
contrary to the conclusion in this Revenue Ruling it
will not be followed.
Accordingly, the taxpayer in the instant case is
entitled to treat the transfer of all substantial
rights in the patent as the sale or exchange of a
capital asset and the gain therefrom is reportable as
long-term capital gain. [Rev. Rul. 69-482, 1969-2 C.B.
at 164-165.]
In previous cases concerning the income characterization of
patent payments, the Commissioner has been consistent in adhering
to its position in Rev. Rul. 69-482, 1969-2 C.B. 164. See, e.g.,
Omholt v. Commissioner, 60 T.C. 541, 547 n.7 (1973) (consistent
with his position stated in Rev. Rul. 69-482, supra, the
Commissioner made no argument that capital gain treatment is
prohibited by section 1235; accordingly, the decision in this
opinion was not made on that basis); Chu v. Commissioner, 58 T.C.
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