Some firms use proprietary software to run their business. The development costs of that development may be eligible to be capitalized under Section 174. The idea is to make it similar to if they simply bought software off the shelf which they would be allowed to capitalize.
Before someone mentions Excel, most firms have a threshold the expense has to clear before it is considered for capitalization. Excel is under most firm’s threshold.
There are limits on how much traffic can pass in and out of the boundaries of an eruv. I suspect that's why it avoids high-traffic areas like Times Square, as well as the area around Turtle Bay.
> Anyone is a set of people that includes the contributor
Should every other member of that set, i.e. everyone minus contributor, also amortize their software development expenses because they have a hypothetical, non-exercised right to use some (i.e. all) open-source "R&D" software... somewhere? Or should the tax liability be invoked starting on the date of first use of any open-source code?
If some code is upstreamed to Linux kernel or userspace, should this obligate every Linux distro consumer to amortize their Linux software development expenses?
There must be _some_ legal boundary for dispersal of the tax obligation with respect to open-source code, since it self-evidently cannot be intended to apply to the entire universe of businesses and union of all OSS development. If necessary, a court case can establish this distinction.
I mean, as long as the average number of Apple devices per person is > 2 (which seems pretty likely, I have three on me right now), that’s still technically in the millions range.
That is correct. Some historical context is much appreciated in this thread.
> tl;dr on Section 174, Research & Experimentation costs went from being fully deductible in the year incurred to being deductible over a 5 year period.
Larger tax bills and a tightening on what roles/activities are deductible as R&E are likely what OP is pointing at with his comment.
To the best of my non-inside baseball research, Section 174 changes were simply one part of a package of revenue generating measures to offset the large tax cuts from the broader tax act they were a part of.
The changes came from The Tax Cuts & Jobs Act of 2017 that was introduced to the House of Representatives by Congressman Kevin Brady (R) Texas. The bill passed both houses of Congress along party lines. Then President Trump signed the bill into law. Section 174 changes did not take effect until 2021.
Only external LLM use is ‘always deductable as op-ex’. If you build your own server farm and/or developer your own LLM, those are capital expenses which must be depreciated.
Have LLMs graduated to testing physical devices?
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