IRS, Treasury to Propose Regulations on R&D Amortization (2)

The IRS and Treasury plan to propose regulations for how and when companies can amortize research and development costs—a hot topic since the Tax Cuts and Jobs Act began requiring companies to amortize R&D expenses over five years rather than all in the year they occur.

In Notice 2023-63 on Friday, the agencies announce the intention to propose formal rules, and they offer interim guidance for more clarity on short tax years, deduction of costs by contractors, software development, abandoned property, and more.

The proposed guidance would clarify what costs could be amortized under the TCJA provision—such as labor costs ...