It Does Not Compute: Copyright Restriction on Tax Deduction for Developer’s Donation of Software

This Article will consider: (i) the various types of intellectual property rights and the methods for transferring those property rights to charity; (ii)the tax consequences to a charity exploiting those rights;(iii) the various restrictions that apply when claiming an income tax charitable deduction; (iv)the application of the current income tax rules to charitable gifts of patents, trade secrets, trademarks and copyrights in general;(v) the tax treatment of an amateur software developer’s donation of computer software to charity under current law and the proper tax treatment of such donations; and(vi)proposals to change the current rules so that an amateur software developer would be able to claim an income tax deduction for the full fair market value of donated software when the software is eligible for patent protection.