26 U.S.C. § 174
Amortization of research and experimental expenditures
# (a) In general
In the case of a taxpayer’s foreign research or experimental expenditures for any taxable year— (1) except as provided in paragraph (2), no deduction shall be allowed for such expenditures, and (2) the taxpayer shall— (A) charge such expenditures to capital account, and (B) be allowed an amortization deduction of such expenditures ratably over the 15-year period beginning with the midpoint of the taxable year in which such expenditures are paid or incurred.
# (b) Foreign research or experimental expenditures
For purposes of this section, the term “foreign research or experimental expenditures” means, with respect to any taxable year, research or experimental expenditures which are paid or incurred by the taxpayer during such taxable year in connection with the taxpayer’s trade or business and which are attributable to foreign research (within the meaning of section 41(d)(4)(F)).
# (c) Special rules
(1) Land and other property This section shall not apply to any expenditure for the acquisition or improvement of land, or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) or section 611 (relating to allowance for depletion); but for purposes of this section allowances under section 167, and allowances under section 611, shall be considered as expenditures.
(2) Exploration expenditures This section shall not apply to any expenditure paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral (including oil and gas).
(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.
# (d) Treatment upon disposition, retirement, or abandonment
If any property with respect to which foreign research or experimental expenditures are paid or incurred is disposed, retired, or abandoned during the period during which such expenditures are allowed as an amortization deduction under this section, no deduction or reduction to amount realized shall be allowed with respect to such expenditures on account of such disposition, retirement, or abandonment and such amortization deduction shall continue with respect to such expenditures.
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Cited by 41
- 26 CFR § 1.1016-5 — Miscellaneous adjustments to basis.
- 26 CFR § 1.162-1 — Business expenses.
- 26 CFR § 1.163(j)-1 — Definitions.
- 26 CFR § 1.167(a)-14 — Treatment of certain intangible property excluded from section 197.
- 26 CFR § 1.167(a)-6 — Depreciation in special cases.
- 26 CFR § 1.174-1 — Research and experimental expenditures; in general.
- 26 CFR § 1.174-2 — Definition of research and experimental expenditures.
- 26 CFR § 1.174-3 — Treatment as expenses.
- 26 CFR § 1.174-4 — Treatment as deferred expenses.
- 26 CFR § 1.199A-9 — Domestic production gross receipts.
- 26 CFR § 1.250(b)-1 — Computation of foreign-derived intangible income (FDII).
- 26 CFR § 1.263(a)-6 — Election to deduct or capitalize certain expenditures.
Show 29 more
- 26 CFR § 1.263A-1 — Uniform capitalization of costs.
- 26 CFR § 1.263A-9 — The avoided cost method.
- 26 CFR § 1.267(a)-2T — Temporary regulations; questions and answers arising under the Tax Reform Act of 1984 (temporary).
- 26 CFR § 1.280C-3 — Disallowance of certain deductions for qualified clinical testing expenses when section 28 credit is allowable.
- 26 CFR § 1.41-2 — Qualified research expenses.
- 26 CFR § 1.41-4 — Qualified research for expenditures paid or incurred in taxable years ending on or after December 31, 2003.
- 26 CFR § 1.41-4A — Qualified research for taxable years beginning before January 1, 1986.
- 26 CFR § 1.41-7 — Special rules.
- 26 CFR § 1.446-1 — General rule for methods of accounting.
- 26 CFR § 1.460-5 — Cost allocation rules.
- 26 CFR § 1.469-4 — Definition of activity.
- 26 CFR § 1.469-4T — Definition of activity (temporary).
- 26 CFR § 1.704-1 — Partner's distributive share.
- 26 CFR § 1.818-2 — Accounting provisions.
- 26 CFR § 1.861-17 — Allocation and apportionment of research and experimental expenditures.
- 26 CFR § 1.936-6 — Intangible property income when an election out is made: Cost sharing and profit split options; covered intangibles.
- 26 CFR § 1.993-4 — Definition of producer's loans.
- 26 CFR § 301.6225-1 — Partnership adjustment by the Internal Revenue Service.
- 26 U.S.C. § 1016 — Adjustments to basis
- 26 U.S.C. § 1202 — Partial exclusion for gain from certain small business stock
- 26 U.S.C. § 1298 — Special rules
- 26 U.S.C. § 168 — Accelerated cost recovery system
- 26 U.S.C. § 170 — Charitable, etc., contributions and gifts
- 26 U.S.C. § 263 — Capital expenditures
- 26 U.S.C. § 263A — Capitalization and inclusion in inventory costs of certain expenses
- 26 U.S.C. § 469 — Passive activity losses and credits limited
- 26 U.S.C. § 56 — Adjustments in computing alternative minimum taxable income
- 26 U.S.C. § 864 — Definitions and special rules
- 26 U.S.C. § 993 — Definitions and special rules
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