
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1249]

 
                     TITLE 26--INTERNAL REVENUE 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
 
Sec. 1249. Gain from certain sales or exchanges of patents, 
        etc., to foreign corporations
        

(a) General rule

    Gain from the sale or exchange after December 31, 1962, 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.

(b) Control

    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, Sec. 16(a), Oct. 16, 1962, 76 Stat. 1045; amended 
Pub. L. 89-809, title I, Sec. 104(m)(3), Nov. 13, 1966, 80 Stat. 1563; 
Pub. L. 94-455, title XIX, Sec. 1901(b)(3)(K), Oct. 4, 1976, 90 Stat. 
1793.)


                               Amendments

    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''.


                    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

    Section 16(c) of Pub. L. 87-834 provided that: ``The amendments made 
by this section [enacting this section] shall apply to taxable years 
beginning after December 31, 1962.''
