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Capitalizing Section 174 research & experimental (R&E) expenses

Presented By:
Amy Forester Emily Murphy Kate Oliver Robert Piwonski
Dec. 8, 2022
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One of the most significant tax changes for many businesses in 2022 is a requirement that taxpayers capitalize and amortize their research and experimentation (R&E) expenses paid or incurred after Dec. 31, 2021, under Section 174. Our tax experts discuss.
U.S. Capitol building in the evening.For tax years beginning after Dec. 31, 2021, a provision from the Tax Cuts and Jobs Act is slated to take effect by modifying Sec. 174 and requiring research expenses to be capitalized and amortized over multiple years instead of being deducted in the year incurred. 

During this webinar, our tax experts discuss this law change, including:

  • The status of potential legislative changes.
  • Identifying R&E costs required to be capitalized.
  • Comparing Section 41 R&D tax credit qualified expenses and Sec. 174 R&E costs
  • Treatment of software development costs.
  • U.S. tax impacts related to research and software development performed overseas.
  • Implementation and the change of accounting method.

Learning objectives:

  • Define the R&E costs required to be capitalized.
  • Develop an understanding of how to implement this change and the change of accounting method.
  • Understand U.S. tax impacts of R&E and software development performed overseas.

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