Wow - lump sum payment? That's a settlement against lost royalties, not past or future costs. Hello taxes.
Jn
Patent trolls
You beat me to it, V. There was a time when RIM could have settled for a couple million dollars if you can believe it. More fools they, for not doing so while they could. Still, I'm glad it's a done deal. I have been waiting for either a settlement or an injunction rather anxiously as the senior managers at work are all BlackBerry mad. I kept saying, "No! We're not buying any more of these gadgets until the legal situation is clearer." I foresee much BlackBerryness in my future.
Jn, any idea of what the tax burden is likely to be? A third, maybe? Will it be taxed as current income?
Mind you, the Patent Office appears to be about to overturn all the NTP patents. But I'm not sure it will make any difference for RIM, this having been decided in the courts. I don't think they have any appeals left.
Then again... RIM apparently can cough up a $600 million settlement and survive. They'll probably be all right in the long run.
Jn, any idea of what the tax burden is likely to be? A third, maybe? Will it be taxed as current income?
Mind you, the Patent Office appears to be about to overturn all the NTP patents. But I'm not sure it will make any difference for RIM, this having been decided in the courts. I don't think they have any appeals left.
Then again... RIM apparently can cough up a $600 million settlement and survive. They'll probably be all right in the long run.
Will it be taxed as current income
It wouldn't all be taxed as current income. No tax accountant, I, but there used to be something called income averaging with a special formula for smoothing a peak year over a five year period. Don't know if they still have it, or the time frame has changed, but no matter how you cut I would think about half will end up with the government.
Sometimes settlements have tax liability written into them. Only part of the settlement is truly for the winner and the rest is for the G. Or the settlement might be paid out as an annuity, which would make the tax liability lower, though still high ... ha! in such a case whatever firm manages the escrow will turn a pretty penny off this as well.
Jn
It wouldn't all be taxed as current income. No tax accountant, I, but there used to be something called income averaging with a special formula for smoothing a peak year over a five year period. Don't know if they still have it, or the time frame has changed, but no matter how you cut I would think about half will end up with the government.
Sometimes settlements have tax liability written into them. Only part of the settlement is truly for the winner and the rest is for the G. Or the settlement might be paid out as an annuity, which would make the tax liability lower, though still high ... ha! in such a case whatever firm manages the escrow will turn a pretty penny off this as well.
Jn
A fool's paradise is a wise man's hell.