RESEARCH AND EXPERIMENTAL EXPENSES
01.Core Concepts
• Costs for the development of an experimental model, plant process, product, formula, or similar property and improvement of such existing property. • Three alternatives are available for R&E expenditures (prior to 2022) 1. Expense in year paid or incurred,* OBBBA restores this option for tax years beginning after December 31, 2024. 2. Defer and amortize over period of 60 months or more (180 months for research conducted outside the United States), OBBBA retains the option to amortize domestic R&E expenses over 60 months and requires amortization over 180 months for R&E outside the U.S. – no option to currently expense foreign R&E expenses,o r 3. Capitalize (deductible when project abandoned or worthless). • Credit of 20% of certain research and experiment expenditures available *No longer available after 2021. 30