OBBB signed: Reinstates immediate expensing for U.S.-based R&D

If correct, this is a good thing on a generally bad, overstuffed bill. Immediate expensing never should have been changed in the first place, and it was always weird seeing people twist themselves in knots defending it.

Twisting not required. Depreciation straightforwardly applies to every other business capital expenditure. Hire someone to put a new roof on a rental property, and you're out the tens of thousands of dollars cash while only getting an immediate deduction for one thirtieth of the value. If you were expecting to pay that cash out of income, it's effectively a realized income and then reinvestment.

The recent (-ly undone) change went against decades of how things were, was crippling for medium size cashflow-positive startups, effectively increased taxes, etc. But it was really just a straightforward application of the general principles that apply to most everything else.

?

This applied to salaries, it wasn't a capital expenditure as "capital expenditure" has traditionally been defined.

This was an operational expense.

Yes, salaries spent to build a capital asset. Half the cost of a new roof is paying salaries, right? And yet, you still depreciate the whole value of the completed thing, not just the cost of the input materials. If you hire the roofers yourself as employees, you're still supposed to be accounting this way - although obviously there are many ways to fudge it.

The point is that building a piece of software that is going to be in use for several+ years is creating an asset. It just goes against our intuition since this industry is so driven by fast fashion, and the bookkeeping of specific components, their depreciation schedules, early end of life, (etc) seems like needless complexity.