[20200810]IN11479_第174节和研发投资.pdf

CRS INSIGHT Prepared for Members and Committees of Congress INSIGHTINSIGHTi i Section 174 and Investment in Research and Development August 10, 2020 In determining their taxable income, companies are allowed to deduct all ordinary and necessary expenses they pay or incur in generating gross income. Those expenses can be current (purchases of inputs with useful lives of less than one year, such as materials and labor compensation) or capital (purchases of assets with useful lives longer than one year, such as patents and computer systems). Current expenses are written off in the year when they are paid or incurred. Capital expenses, by contrast, are written off over the period when acquired tangible and intangible assets lose economic value through amortization or depreciation allowances. Since 1954, companies engaged in research and development (R&D) have been allowed to deduct in full certain R&D expenses in the year when they were paid or incurred when calculating their taxable income. This treatment is known as expensing and is allowed for qualified research expenses (QREs) related to domestic and foreign research under Internal Revenue Code (IRC) Section 174(a). The following r