DEFINITION of Intangible Personal Property
Intangible personal property is something of individual value that cannot be touched or held. Intangible personal property can include any item of worth that is not physical in nature but instead represents something else of value. Examples of intangible personal property include patents, copyrights, life insurance contracts, securities investments and partnership interests. This can be contrasted with tangible personal property, such as real estate, jewelry, electronics and other items which can be physically touched and have value. Intangible property is not just limited to individuals. Companies also have intangible property, such as goodwill.
BREAKING DOWN Intangible Personal Property
The value in intangible personal property lies in its benefits and value recognition. Intellectual property is one of the most common forms of intangible personal property. This type of property is sometimes taxed by some jurisdictions. Other types of intangible personal property include life insurance contracts, securities investments, and royalty agreements, and partnership interests. The most common forms of intangible property for companies include goodwill, research and development and patents.
Examples of Intangible Personal Property
For example, Bob invented a solution that when rubbed on a tattoo will cause the tattoo to blend into the surrounding skin rendering it invisible. There is also a solvent to remove the tattoo obstructing solution. Bob was issued a patent for both of the formulas. The patent, which keeps others from copying his formulas, gives him sole ownership rights over this invention for the duration of the patent. Bob will enjoy the financial benefits of being the sole seller of this breakthrough tattoo obstructing concoction. Those financial benefits can be represented by the patent, which does not have any inherent value itself but is valuable because of these future benefits.