Regular tax tune-ups ensure you’ll keep moving forward smoothly. Stay in the know with this monthly tax update series, featuring Ed Zollars, CPA
Learning Objectives
Despite expectations of a repeal or delay, the Tax Cuts and Jobs Act (TCJA) of 2017's provision for capitalizing and amortizing research, experimental, and software development costs has taken effect in 2022. Addressing this, the IRS recently released Notice 2023-63 to clarify how to navigate these new requirements. In this course, we'll dissect which expenses are subject to amortization and offer strategies for allocating costs between §174 and those eligible for current deductions. We'll also explore the procedural aspects of changing accounting methods for these costs and examine the likelihood that Congress may still retroactively repeal this change. Equip yourself with the essential knowledge to adapt to these significant tax adjustments.
Major Topics
- Topics to Be Covered:
- Exploring the Tax Cuts & Jobs Act's modifications to IRC §174 and the rationale behind the delay in its effective date.
- Unpacking the unsuccessful efforts to repeal or postpone the §174 provisions, despite facing little to no opposition.
- Understanding the enduring relevance of pre-law definitions for research and experimental expenditures under Treasury Reg. §1.174-2.
- Delving into what constitutes research and experimental expenditures, and how to accurately allocate these costs for amortization.
- Clarifying the Notice’s criteria for software development costs subject to amortization and identifying costs that are exempt.
- Outlining the procedural steps to secure permission for the mandated change in accounting methods.
