IRC S. 174 and the depreciation rules jarred me awake yesterday. I wanted to share some relevant links that I thought others might also benefit from seeing:
This defines what constitutes Research and Experimental Expenditures. I am not a lawyer, I am not your lawyer, and so forth. The key discussion in this section and how R&E is created appears to be related to the elimination of uncertainty: " Uncertainty exists if the information available to the taxpayer does not establish the capability or method for developing or improving the product or the appropriate design of the product." Fortunately, item (10) appears to address work-for-hire, if any here were concerned.
IRC S. 174 and the depreciation rules jarred me awake yesterday. I wanted to share some relevant links that I thought others might also benefit from seeing:
[1] 26 CFR § 1.174-2 - Definition of research and experimental expenditures: https://www.law.cornell.edu/cfr/text/26/1.174-2
This defines what constitutes Research and Experimental Expenditures. I am not a lawyer, I am not your lawyer, and so forth. The key discussion in this section and how R&E is created appears to be related to the elimination of uncertainty: " Uncertainty exists if the information available to the taxpayer does not establish the capability or method for developing or improving the product or the appropriate design of the product." Fortunately, item (10) appears to address work-for-hire, if any here were concerned.
[2] 26 U.S. Code § 174 - Amortization of research and experimental expenditures: https://www.law.cornell.edu/uscode/text/26/174 -- software development definition here is of concern.