Qualified cost sharing arrangement.

Qualified cost sharing arrangement. A qualified cost sharing arrangement must
(1) Include two or more participants;
(2) Provide a method to calculate each controlled participant's share of intangible development costs, based on factors that can reasonably be expected to reflect that participant's share of anticipated benefits;
(3) Provide for adjustment to the controlled participants' shares of intangible development costs to account for changes in economic conditions, the business operations and practices of the participants, and the ongoing development of intangibles under the arrangement; and
(4) Be recorded in a document that is contemporaneous with the formation (and any revision) of the cost sharing arrangement and that includes—
(i) A list of the arrangement's participants, and any other member of the controlled group that will benefit from the use of intangibles developed under the cost sharing arrangement;
(ii) The information described in paragraphs (b)(2) and (b)(3) of this section;
(iii) A description of the scope of the research and development to be undertaken, including the intangible or class of intangibles intended to be developed;
(iv) A description of each participant's interest in any covered intangibles. A covered intangible is any intangible property that is developed as a result of the research and development undertaken under the cost sharing arrangement (intangible development area);
(v) The duration of the arrangement; and
(vi) The conditions under which the arrangement may be modified or terminated and the consequences of such modification or termination, such as the interest that each participant will receive in any covered intangibles.


26 CFR § 1.482-7A

Scoping language

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