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A Costly Look at How Sausage Is Made

By: Robert Willens C&F Packing won its trade secret case against Pizza Hut last year, but found out the hard way that settlements related to trade-secret misappropriation are taxed as ordinary income. Last year, the shareholders of C&F Packing Co. found themselves on the winning side of a trade secret settlement. Unfortunately, the shareholders also got handed a tax bill along with the award. Once again, a tax court ruling underscores a lesson corporations still fail to remember: that certain payouts received as a result of a lawsuit are treated as ordinary income for tax purposes. To continue reading this interesting article from CFO, please click here.

Full post as published by The Trade Secrets Vault on May 25, 2010 (boomark / email).