Taxes on data licensing income: questions for your CPA

Your accountant needs the deal's structure: license versus sale, lump sum versus revenue share, and whether the company or an owner gets paid. The contract locks those in, so adjust them before signing.

• The draft contract, and whether it calls the deal a license or a sale
• Payment terms: lump sum, instalments or revenue share
• Whether money goes to the business or to an owner personally
• Whether a broker is involved and what it takes
• Any referral payment, listed separately from license fees

Check with the buyer as well, since it may send tax forms and ought to explain what it files.

Accounting firms have written about the difference between licensing and selling intellectual property in general. Whether those rules apply to your deal is your CPA's call.