Internal Revenue Code · 26 U.S.C.
§ 1249. Gain from certain sales or exchanges of patents, etc., to foreign corporations
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 1249
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- October 16, 1962 by Pub. L. 87–834
- Last amended
- December 19, 2014 by Pub. L. 113–295
- Amendments
- 3 dated changes in the source credit
- Length
- 2 subsections · 202 words · about 1 min to read
- Cross-references
- cites 3; cited by 0 Code sections and 0 other regulations
- Regulations
- 1 issued under this section
Gain from the sale or exchange of a patent, an invention, model, or design (whether or not patented), a copyright, a secret formula or process, or any other similar property right to any foreign corporation by any United States person (as defined in section 7701(a)(30)) which controls such foreign corporation shall, if such gain would (but for the provisions of this subsection) be gain from the sale or exchange of a capital asset or of property described in section 1231, be considered as ordinary income.
For purposes of subsection (a), control means, with respect to any foreign corporation, the ownership, directly or indirectly, of stock possessing more than 50 percent of the total combined voting power of all classes of stock entitled to vote. For purposes of this subsection, the rules for determining ownership of stock prescribed by section 958 shall apply.
(Added Pub. L. 87–834, § 16(a), Oct. 16, 1962, 76 Stat. 1045; amended Pub. L. 89–809, title I, § 104(m)(3), Nov. 13, 1966, 80 Stat. 1563; Pub. L. 94–455, title XIX, § 1901(b)(3)(K), Oct. 4, 1976, 90 Stat. 1793; Pub. L. 113–295, div. A, title II, § 221(a)(84), Dec. 19, 2014, 128 Stat. 4049.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 1249
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 3 other sections
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter P Capital Gains and Losses
- Part IV SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
Nearby sections
- § 1244 Losses on small business stock
- § 1245 Gain from dispositions of certain depreciable property
- § 1246, 1247 Repealed
- § 1248 Gain from certain sales or exchanges of stock in certain foreign corporations
- § 1249 Gain from certain sales or exchanges of patents, etc., to foreign corporations
- § 1250 Gain from dispositions of certain depreciable realty
- § 1251 Repealed
- § 1252 Gain from disposition of farm land
- § 1253 Transfers of franchises, trademarks, and trade names
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2014—Subsec. (a). Pub. L. 113–295 struck out “after December 31, 1962,” before “of a patent”.
1976—Subsec. (a). Pub. L. 94–455 substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.
1966—Subsec. (a). Pub. L. 89–809 substituted “Gain” for “Except as provided in subsection (c), gain”.
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date of 1966 Amendment
Amendment by Pub. L. 89–809 applicable with respect to taxable years beginning after Dec. 31, 1966, see section 104(n) of Pub. L. 89–809, set out as a note under section 11 of this title.
Effective Date
Pub. L. 87–834, § 16(c), Oct. 16, 1962, 76 Stat. 1045, provided that: “The amendments made by this section [enacting this section] shall apply to taxable years beginning after December 31, 1962.”