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No, what you linked to there specifically says that "In the case of a taxpayer’s specified research or experimental expenditures for any taxable year", _then_ a

No, what you linked to there specifically says that "In the case of a taxpayer’s specified research or experimental expenditures for any taxable year", _then_ any software development is classified as R&D for the purpose of requiring capitalization. I don't see anywhere saying that _any and all software development_ is considered "research or experimental". Ie., if some company pays you to build a piece of software and you hand it over when you're done, you were not engaged in research/experimental expenditures if you paid people to build said software.

Gormo 3y ago
> Ie., if some company pays you to build a piece of software and you hand it over when you're done, you were not engaged in research/experimental expenditures if you paid people to build said software. Then it's your customer's R&D, and they have to amortize their payment to you. If you're doing outsourced software development for SMBs and startups, you might not be directly taxed under this rule, but your customers are, which significantly affects the market for your services.
- nicksergeant 3y ago
  Absolutely true! It's a burden on our clients for sure, and something I'll be sure to make them aware of before signing on (presuming this section doesn't get unturned in the near future...)
elicksaur 3y ago
The link literally says that: > 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.
- nicksergeant 3y ago
  Yes, "For purposes of this section" meaning "Section 174", which is about: > (a)In general > In the case of a taxpayer’s specified research or experimental expenditures for any taxable year— So if you are not doing "research or experimental expenditures", all of the specifications in this section do not apply to you.

Gormo 3y ago

> Ie., if some company pays you to build a piece of software and you hand it over when you're done, you were not engaged in research/experimental expenditures if you paid people to build said software. Then it's your customer's R&D, and they have to amortize their payment to you. If you're doing outsourced software development for SMBs and startups, you might not be directly taxed under this rule, but your customers are, which significantly affects the market for your services.

nicksergeant 3y ago
Absolutely true! It's a burden on our clients for sure, and something I'll be sure to make them aware of before signing on (presuming this section doesn't get unturned in the near future...)

elicksaur 3y ago

The link literally says that: > 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.

nicksergeant 3y ago
Yes, "For purposes of this section" meaning "Section 174", which is about: > (a)In general > In the case of a taxpayer’s specified research or experimental expenditures for any taxable year— So if you are not doing "research or experimental expenditures", all of the specifications in this section do not apply to you.