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Investment Opportunities in Research and Development  

Author:  Nicholas C. Lynch.; Michael F. Lynch.

Source: Volume 36, Number 03, Spring 2019 , pp.55-68(14)

Journal of Taxation of Investments

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Recent tax law changes concerning research and development (R&D) expenditures favorably impact many taxpayers’ and investors’ decisions. Still, many small and medium-sized business owners are unaware that the R&D credit may benefit them. Large businesses also benefit from the elimination of the alternative minimum tax. This article discusses the history of the credit and how it is computed, the types of expenditures that qualify for the credit, and the latest statutory changes. The benefits of R&D are significant. Effective tax rates are reduced. Cash flows and market value are increased.

Keywords: research and development, R&D credit, IRC Section 41, IRC Section 280C election, IRC Section 174, research and experimentation

Affiliations:  1: California State University, Chico; 2: Bryant University.

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