IRS rules on sales-based royalties treatment

The IRS has determined that for sales-based royalties for tax years ending on or after January 13, 2014, taxpayers can either

  1. allocate sales-based royalties entirely to property sold and include those costs in cost of goods sold or
  2. allocate sales-based rolaties betwen cost of goods sold and ending inventory using a facts and cirucmstances cost allocation method as described in Regs Sec. 1.263A-1(f) or a simplified method


Permanent link to this article:

Leave a Reply

Your email address will not be published.