Page:United States Statutes at Large Volume 70.djvu/460

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PUBLIC LAW 6 2 9 - J U N E 29, 1966

Public Law 629 June 29. 1956 [H. R. 6143]

Taxes. Patent rlght«. 65 StaU 504.

[70 S T A T. CHAPTER

464

AN ACT To amend the Internal Revenue Codes of 1939 and 1954, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section llT of the Internal Revenue Code of 1939 (relating to capital gains and losses) is hereby amended by adding at the end thereof a new subsection as follows: ''(<j)

TRANSFER OF P A T E N T R I G H T S. —

"(1) GENERAL RULE.—A transfer (other than by gift, inherit, ance, or devise) of property consisting of all substantial rights to a patent, or an undivided interest therein which includes a part of all such rights, by any holder shall be considered the sale or exchange of a capital asset held for more than 6 months, regardless of whether or not payments in consideration of such transfer are— " (A) payable periodically over a period generally coterminous with the transferee's use of the patent, or " (B) contingent on the productivity, use, or disposition of the property transferred. "(2) 'HOLDER' DEFINED.—For purposes of this subsection, the term 'holder' means— " (A) any individual whose efforts created such property, or " (B) any other individual who has acquired his interest in such property in exchange for consideration in money or money's worth paid to such creator prior to actual reduction to practice of the invention covered by the patent, if such individual is neither— " (i) the employer of such creator, nor "(ii) related to such creator (within the meaning of paragraph (3)). "(3] EXCEPTIONS.—This subsection shall not apply to any transfer described in paragraph (1) — " (A) by a nonresident alien individual, or " (B) between an individual and any related person. For purposes of this paragraph, the term 'related person' means a person, other than a brother or sister (whether of the whole or half blood), with respect to whom a loss resulting from the transfer would be disallowed under section 24(b). "(4) APPLICABILITY.—This subsection shall apply with respect to any amount received, or payment made, pursuant to a transfer described in paragraph (1) in any taxable year beginning after May 31, 1950, regardless of the taxable year in which such transfer occurred." SEC. 2. CERTAIN CLAIMS AGAINST UNITED STATES. 53 Stat. 36.

(a) Section 106 of the Internal Revenue Code of 1939 (relating to claims against the United States involving acquisition of property) is hereby amended to read as follows: -SEC. 106. CERTAIN CLAIMS AGAINST UNITED STATES.

"In the case of any amount (other than interest) received by a taxpayer from the United States with respect to a claim against the United States— " (a) involving the acquisition of property and remaining unpaid for more than 15 years, or '*(b) arising under a contract for the construction of installations or facilities for any branch of the armed services of the

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