Comment by silverlight
3 years ago
In the example I am giving it would be any expense related to "software development." So paying a salary to another person on your team (or 1099 income to a contractor), buying tools to aid in the development, anything at all really.
You're absolutely not required to categorize things like payroll as amortizable R&D.
To be clear I would love for this to be the case. I'm just curious though how you would justify saying a developer's salary is not a software development expense?
You need to talk to an actual accountant or tax lawyer. The key verbiage is "for the purposes of this section", and the language which optionally supersedes it in other sections (notably section 162) in combination with several court rulings.
You really can't just read individual sections of the tax code and expect to understand how the thing works as a whole.
3 replies →
If they paid an outsourcing company, not direct hire through payroll, then there is no payroll?