An assignment of intellectual property in an investment deal might be required by the investor in a seed capital transaction. Aside from that requirement, the assignment could be very helpful in startups with multiple founders. Additionally, there could be some tax benefit to structuring a stock transfer as consideration for an assignment of intellectual property. Assuming it is a bona fide transaction, the stock received will not be subject to IRC Section 83(a), meaning that no income or gains are recognized by the transaction. The stock acquires the tax basis of the property it was exchanged for (often $0) and the income or gains are not recognized until the stock is subsequently sold or otherwise liquidated.

If you are interested in assigning your intellectual property to a startup corporation, please contact us.