Comment by jbverschoor
3 years ago
> (3) Software development
> 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.
I'm just "parroting" from house.gov
For purposes of this section
This section describes how to handle expenses you consider to honestly be research and experimental expenditure. It does not supersede all other sections of the tax code and magically cause all software expenses to get sucked under this section. It simply instructs you how to proceed when evaluating your R&E expenditure, of which software development unambiguously qualifies.
Section 174 literally begins with
> In General
> In the case of a taxpayer’s specified research or experimental expenditures for any taxable year—
And this section is "26 USC 174: Amortization of research and experimental expenditures"
Why is it so hard to believe? The US has a credit problem. There's a ton of money going to software dev. It gives the government some easy access to capital. It's essentially a loan from tech companies
Amortization of research and experimental expenditures applies to research and experimental expenditures. It doesn't apply to the money you spent paying a contractor to hook your PoS and Shopify into Stripe. If you’re researching how to cure brain cancer by experimenting on rats with gene therapy, then yeah, you might consider organizing your expenses under the provisions of section 174. But even then it’s not a requirement.
@dcow, sure, but it says, and that's what all the fuzz imo is about:
"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."
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