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26 U.S.C. § 174 — Amortization of research and experimental expenditures
Federal law — U.S. Code and appendices · legal_authorities
**(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 amo
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 174
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Stable record: federal_law:legal_authorities:record_usc_dad6873db28674e291c64d8e
Source file: Laws/federal/codes/united-states-code/title-26/section-174-amortization-of-research-and-experimental-expenditures--bda67e58ba.md
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Source location: Title 26, Chapter 1, § 174; chapter-001-normal-taxes-and-surtaxes.md
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**(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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Federal law — U.S. Code and appendices · legal_authorities
**(a) Gross income from sources within United States** The following items of gross income shall be treated as income from sources within the United States:
(1) **Interest** — Interest from the United States or the District of Columbia, and interest on bonds, notes, or other interest-bearing obligations of noncorporate residents or domestic corporations not including—
(A) interest—
(i) on deposits with a foreign branch of a domestic corporation or a domestic partnership if such branch is engaged in the commercial banking business, and
(ii) on amounts satisfying the requirements of subparagraph (B) of section 871(i)(3) which are paid by a foreign branch of a domestic corporation or a domestic partnership, and
(B) in the case of a foreign partnership, which is predominantly engaged in the active conduct of a trade or business outside the United States, any interest not paid by a trade or business engaged in by the partnership in the United States and not allocable to income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States.
(2) **Dividends** — The amount received as dividends—
(A) from a domestic corporation, or
(B) from a foreign corporation unless less than 25 percent of the gross income from all sources of such foreign corporation for the 3-year period ending with the close of its taxable year preceding the declaration of such dividends (or for such part of such period as the corporation has been in existence) was effectively connected (or treated as effectively connected other than income described in section 884(d)(2)) with the conduct of a trade or business within the United States; but only in an amount which bears the same ratio to such dividends as the gross in
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 861
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Other rates of tax on individuals, etc.**
(1) For rates of tax on nonresident aliens, see section 871.
(2) For doubling of tax on citizens of certain foreign countries, see section 891.
(3) For rate of withholding in the case of nonresident aliens, see section 1441.
(4) For alternative minimum tax, see section 55.
**(b) Special limitations on tax**
(1) For limitation on tax in case of income of members of Armed Forces, astronauts, and victims of certain terrorist attacks on death, see section 692.
(2) For computation of tax where taxpayer restores substantial amount held under claim of right, see section 1341.
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 5
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** There is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to the excess (if any) of—
(1) the tentative minimum tax for the taxable year, over
(2) the regular tax for the taxable year plus, in the case of an applicable corporation, the tax imposed by section 59A.
**(b) Tentative minimum tax** For purposes of this part—
(1) **Noncorporate taxpayers** — In the case of a taxpayer other than a corporation—
(A) *In general* — The tentative minimum tax for the taxable year is the sum of—
(i) 26 percent of so much of the taxable excess as does not exceed $175,000, plus
(ii) 28 percent of so much of the taxable excess as exceeds $175,000.
The amount determined under the preceding sentence shall be reduced by the alternative minimum tax foreign tax credit for the taxable year.
(B) *Taxable excess* — For purposes of this subsection, the term “taxable excess” means so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount.
(C) *Married individual filing separate return* — In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting 50 percent of the dollar amount otherwise applicable under clause (i) and clause (ii) thereof. For purposes of the preceding sentence, marital status shall be determined under section 7703.
(D) *Alternative minimum taxable income* — The term “alternative minimum taxable income” means the taxable income of the taxpayer for the taxable year—
(i) determined with the adjustments provided in section 56 and section 58, and
(ii) increased by the amount of the items of tax preference described in section 57.
If a taxpayer is subject to the regular tax, such taxpayer shal
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 55
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of section 38, the research credit determined under this section for the taxable year shall be an amount equal to the sum of—
(1) 20 percent of the excess (if any) of—
(A) the qualified research expenses for the taxable year, over
(B) the base amount,
(2) 20 percent of the basic research payments determined under subsection (e)(1)(A), and
(3) 20 percent of the amounts paid or incurred by the taxpayer in carrying on any trade or business of the taxpayer during the taxable year (including as contributions) to an energy research consortium for energy research.
**(b) Qualified research expenses** For purposes of this section—
(1) **Qualified research expenses** — The term “qualified research expenses” means the sum of the following amounts which are paid or incurred by the taxpayer during the taxable year in carrying on any trade or business of the taxpayer—
(A) in-house research expenses, and
(B) contract research expenses.
(2) **In-house research expenses**
(A) *In general* — The term “in-house research expenses” means—
(i) any wages paid or incurred to an employee for qualified services performed by such employee,
(ii) any amount paid or incurred for supplies used in the conduct of qualified research, and
(iii) under regulations prescribed by the Secretary, any amount paid or incurred to another person for the right to use computers in the conduct of qualified research.
Clause (iii) shall not apply to any amount to the extent that the taxpayer (or any person with whom the taxpayer must aggregate expenditures under subsection (f)(1)) receives or accrues any amount from any other person for the right to use substantially identical personal property.
(B) *Qualified services* — The term “qualified s
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 41
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Treatment as expenses** Notwithstanding section 263, there shall be allowed as a deduction any domestic research or experimental expenditures which are paid or incurred by the taxpayer during the taxable year.
**(b) Domestic research or experimental expenditures** For purposes of this section, the term “domestic research or experimental expenditures” means research or experimental expenditures paid or incurred by the taxpayer in connection with the taxpayer’s trade or business other than such expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F)).
**(c) Amortization of certain domestic research or experimental expenditures**
(1) **In general** — At the election of the taxpayer, made in accordance with regulations or other guidance provided by the Secretary, in the case of domestic research or experimental expenditures which would (but for subsection (a)) be chargeable to capital account but not chargeable to property 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), subsection (a) shall not apply and the taxpayer shall—
(A) charge such expenditures to capital account, and
(B) be allowed an amortization deduction of such expenditures ratably over such period of not less than 60 months as may be selected by the taxpayer (beginning with the month in which the taxpayer first realizes benefits from such expenditures).
(2) **Time for and scope of election** — The election provided by paragraph (1) may be made for any taxable year, but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The method so elected, and the period
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 174A
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Federal law — U.S. Code and appendices · legal_authorities
Page 891
TITLE 26—INTERNAL REVENUE CODE
§ 174
duction shall not be allowed with respect to the
portion of such expenditures as, under regula-
tions prescribed by the Secretary, is chargeable
to capital account if the taxpayer elects, in ac-
cordance with such regulations, to treat such
portion as so chargeable. Such election, if made,
must be for the total amount of such portion of
the expenditures which is so chargeable to cap-
ital account, and shall be binding for all subse-
quent taxable years unless, upon application by
the taxpayer, the Secretary permits a revoca-
tion of such election subject to such conditions
as he deems necessary.
(b) Cross reference
For election of 3-year amortization of expendi-
tures allowable as a deduction under subsection (a),
see section 59(e).
(Aug. 16, 1954, ch. 736, 68A Stat. 65; Pub. L. 94–455,
title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat.
1834; Pub. L. 97–248, title II, § 201(d)(9)(A), for-
merly § 201(c)(9)(A), Sept. 3, 1982, 96 Stat. 420, re-
numbered § 201(d)(9)(A), Pub. L. 97–448, title III,
§ 306(a)(1)(A)(i), Jan. 12, 1983, 96 Stat. 2400; Pub.
L. 98–369, div. A, title VII, § 711(a)(3)(C), July 18,
1984, 98 Stat. 942; Pub. L. 99–514, title VII,
§ 701(e)(4)(D), Oct. 22, 1986, 100 Stat. 2343; Pub. L.
100–647, title I, § 1007(g)(5), Nov. 10, 1988, 102 Stat.
3435.)
Editorial Notes
AMENDMENTS
1988—Subsec. (b). Pub. L. 100–647 substituted ‘‘section
59(e)’’ for ‘‘section 59(d)’’.
1986—Subsec. (b). Pub. L. 99–514 substituted ‘‘section
59(d)’’ for ‘‘section 58(i)’’.
1984—Subsec. (b). Pub. L. 98–369 substituted ‘‘3-year’’
for ‘‘10-year’’.
1982—Pub. L. 97–248, § 201(d)(9)(A), designated existing
provisions as subsec. (a), added subsec. (a) heading, and
added subsec. (b).
1976—Pub. L. 94–455 struck out ‘
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 174
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