The case of Robinson Knife Manufacturing Company, Inc., discussed by Christopher Karachale in his article in M & A Tax Report, asked whether royalty payments to trademark owners were deductible as ordinary and necessary business expenses under Code Sec. 162. The Court explored the difference between costs incurred in production versus costs incurred only upon the sale of the item.
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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.
Read this article from CCH’s Journal of Taxation of Financial Products