8165 / To what extent may patents or copyrights be eligible for depreciation allowances?

Under IRC Section 167, a taxpayer may be entitled to a depreciation deduction of intangible property, such as a patent or copyright, used in a trade or business or held for the production of income over the useful life of the property, if that property has a limited useful life that can be reasonably estimated.¹ The taxpayer may choose to depreciate over a useful life of 15 years as a safe harbor, but this safe harbor generally only applies to intangibles acquired or created as a part of the acquisition of a trade or business (so that self-created intangibles are generally excluded).