Halbert Zweistein is a renowned physicist and Nobel Prize wi

Halbert Zweistein is a renowned physicist and Nobel Prize winner who holds numerous patents. Halbert owns the copyrights to the 75 books he wrote in a long career. He has also collected his voluminous correspondence, notes, journals, and other papers that he plans to sell to a library in a major eastern city. Which of the following will result in capital gain or capital loss?

Solution

As per Internal Revenue Code Section 1221 - a patent, invention, model or design (whether or not patented), a secret formula or process, a copyright, a literary, musical, or artistic composition, a letter or memorandum are specifically excluded from the term \'Capital Asset\'.

So, none of the items will result in Capital Gain or CapitalLoss.