Volume 69
Public Law 84–366
To amend the Internal Revenue Code of 1954 with respect to the tax treatment of income received from patent infringement suits.
Approved August 11, 1955
Statutory text
AN ACT
To amend the Internal Revenue Code of 1954 with respect to the tax treatment of income received from patent infringement suits.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
That
part I of subchapter Q of chapter 1 of the Internal Revenue Code of 1954 is
hereby amended by renumbering section 1304 as section 1305, and by inserting after section 1303 the following new section:
“SEC. 1304. COMPENSATORY DAMAGES FOR PATENT INFRINGEMENT.
“If an amount representing compensatory damages is received or accrued by a taxpayer during a taxable year as the result of an award in a civil action for infringement of a patent issued by the United States, then the tax attributable to the inclusion of such amount in gross income for the taxable year shall not be greater than the aggregate of the increases in taxes which would have resulted if such amount had been included in gross income in equal installments for each month during which such infringement occurred.”
The table of sections for such part I is hereby amended by striking out
and inserting in lieu thereof the following:
Sec. 2.
The amendments made by the first section of this Act shall apply with respect to taxable years ending after the date of the enactment of this Act, but only with respect to amounts received or accrued after such date as the result of awards made after such date.
Approved August 11, 1955.