26 U.S.C. § 174
Amortization of research and 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)).
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.
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).
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.
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.
2025—Subsec. (a). Pub. L. 119–21, § 70302(b)(1)(A)(i), substituted “a taxpayer’s foreign research or experimental expenditures” for “a taxpayer’s specified research or experimental expenditures” in introductory provisions.
Subsec. (a)(2)(B). Pub. L. 119–21, § 70302(b)(1)(A)(ii), substituted “over the 15-year period” for “over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F)))”.
Subsec. (b). Pub. L. 119–21, § 70302(b)(1)(B), substituted “Foreign” for “Specified” in heading and “foreign research” for “specified research” in text and inserted before period at end “and which are attributable to foreign research (within the meaning of section 41(d)(4)(F))”.
Subsec. (d). Pub. L. 119–21, § 70302(b)(1)(C), substituted “foreign research or experimental expenditures” for “specified research or experimental expenditures” and inserted “or reduction to amount realized” after “no deduction”.
2017—Pub. L. 115–97 amended section generally. Prior to amendment, section consisted of subsecs. (a) to (f) relating to treatment of research and experimental expenditures as expenses, amortization of certain research and experimental expenditures, expenditure for the acquisition or improvement of land or property, ore and mineral deposit exploration expenditures, limitation to reasonable research expenditures eligible, and cross references, respectively.
2014—Subsec. (a)(2)(A). Pub. L. 113–295, § 221(a)(31), amended subpar. (A) generally. Prior to amendment, text read as follows: “A taxpayer may, without the consent of the Secretary, adopt the method provided in this subsection for his first taxable year—
“(i) which begins after
“(ii) for which expenditures described in paragraph (1) are paid or incurred.”
Subsec. (b)(2). Pub. L. 113–295, § 221(a)(32), struck out “beginning after
1989—Subsecs. (e), (f). Pub. L. 101–239 added subsec. (e) and redesignated former subsec. (e) as (f).
1988—Subsec. (e)(2). Pub. L. 100–647 substituted “section 59(e)” for “section 59(d)”.
1986—Subsec. (e)(2). Pub. L. 99–514 substituted “section 59(d)” for “section 58(i)”.
1982—Subsec. (e). Pub. L. 97–248, § 201(d)(9)(B), substituted “Cross references” for “Cross reference” in heading, designated existing provisions as par. (1), and added par. (2).
1976—Subsec. (a)(2)(A). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (a)(2)(A)(i). Pub. L. 94–455, § 1901(a)(30), substituted “
Subsecs. (a)(3), (b)(1), (2). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Amendment by Pub. L. 119–21 applicable to amounts paid or incurred in taxable years beginning after
Pub. L. 115–97, title I, § 13206(b),
Amendment by Pub. L. 115–97 applicable to amounts paid or incurred in taxable years beginning after
Amendment by Pub. L. 113–295 effective
Amendment by Pub. L. 101–239 applicable to taxable years beginning after
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Amendment by Pub. L. 99–514 applicable to taxable years beginning after
Amendment by Pub. L. 97–248 applicable to taxable years beginning after
For applicability of amendment by Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on
Pub. L. 97–34, title II, § 223(a),