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Tag: R&E

Mandatory Capitalization of R&E Expenses – The Impact on Life Sciences Companies

Life sciences companies engage in considerable, and often exclusively in, research and development activity. Not surprisingly, these companies often face unique challenges relating to R&D — from make-or-build vs. buy decisions, contract research and contract development, and manufacturing arrangements — as they progress through the clinical stages to commercial operations. The R&D landscape for life sciences companies is further complicated by additional challenges brought...

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Mandatory Capitalization Of R&E Expenses – The Impact On Technology Companies

Featuring Frank Calabrese, CPA Businesses that invest in research and development, particularly those in the technology industry, should be aware of a major change to the tax treatment of research and experimental (R&E) expenses. Under the 2017 Tax Cuts and Jobs Act (TCJA), R&E expenditures incurred or paid for tax years beginning after December 31, 2021, will no longer be immediately deductible for tax purposes. Instead, businesses are now required to capitalize and amortize...

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Significant Change to the Treatment of R&E Expenditures Now In Effect

As 2022 kicks off and tax legislation continues to be stalled in Congress, the amendment to Internal Revenue Code (IRC) Section 174 originally introduced by the 2017 tax reform legislation, the Tax Cuts and Jobs Act (TCJA), is now in effect. TCJA’s amendment to Section 174 requires U.S.-based and non-U.S-based research and experimental (R&E) expenditures to be capitalized and amortized over a period of five or 15 years, respectively, for amounts paid in tax years starting after...

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