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

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342 points tareqak | 1 comments | 05 Jul 25 00:24 UTC | HN request time: 0.369s | source
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n_u ◴[05 Jul 25 00:57 UTC] No.44469277[source]▶
It also classifies software development as R&D which together with immediate expensing for R&D undoes the Section 174 changes as far as I understand.

“For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure“

Page 303 of bill here https://www.congress.gov/119/bills/hr1/BILLS-119hr1eas.pdf

Original article about Section 174 tax code causing layoffs

https://news.ycombinator.com/item?id=44180533

Post from @dang with more info about Section 174

https://news.ycombinator.com/item?id=44226145

replies(3): >>44470452 #>>44470486 #>>44470780 #
tareqak ◴[05 Jul 25 06:19 UTC] No.44470486[source]▶
Page 301

> there shall allowed as a deduction any domestic research and experimental expenditures which are paid or incurred by the taxpayer in the current taxable year

AFAIK, there was no domestic vs. foreign R&D distinction in section 174 before.

replies(1): >>44470795 #
1. Thorrez ◴[05 Jul 25 07:33 UTC] No.44470795[source]▶
There was a domestic vs foreign distinction in the TCJA, passed in 2017, which took effect in 2022:

> 174 to require taxpayers to amortize specified R&E expenditures ratably over a five-year period for domestic expenditures and a 15-year period for specified R&E expenditures attributed to foreign research

https://www.journalofaccountancy.com/issues/2022/nov/amortiz...