Comment by mminer237
3 years ago
If you make $2,000,000 gross, spend $800,000 on operating expenses, and $1,000,000 on R&D, you practically have $200,000 profit; but you have pay $210,000 in federal tax on $1,000,000.
3 years ago
If you make $2,000,000 gross, spend $800,000 on operating expenses, and $1,000,000 on R&D, you practically have $200,000 profit; but you have pay $210,000 in federal tax on $1,000,000.
Well no, you have a 1.2M profit, and decided to reinvest 1M into R&D to produce a software asset.
It's bad that the tax treatment changes suddenly because businesses need stability, but the change itself is perfectly rational.