Samples

Real engine outputs, exactly as delivered. The Brief is the first page of the Memo — every question gets the full research treatment.

Built for Circular 230 due diligence. Every answer fully cited and independently verifiable.

Federal Tax·13 citations·Brief · sample·Generated June 2026

Research Result

Question: How does § 174A immediate R&D expensing apply to a software-startup client's 2025 return, including the small-business retroactive election for 2022–2024 and the § 280C(c)(2) coordination? Include the impact on QBI.

Practice Brief: § 174A R&D Expensing for Software Startups

Bottom line (1 sentence): Your software-startup client may immediately deduct 2025 domestic R&D under new § 174A and has until July 6, 2026 (25 days from today) to elect retroactive treatment for 2023–2024 if gross receipts averaged ≤ $31M.

🔴 Action Required

  • Verify gross-receipts eligibility for the retroactive election by calculating average annual gross receipts for 2020–2022 (2023 eligibility) and 2021–2023 (2024 eligibility) under the § 448(c) ≤ $31M test. — Rev. Proc. 2025-28

  • File amended returns (Forms 1040-X or 1120-X) by July 6, 2026 for tax years 2023 and 2024 if the retroactive § 174A election is beneficial; attach a statement electing retroactive treatment and recalculate the deduction net of any § 280C(c)(2) research credit reduction. — Rev. Proc. 2025-28

  • Model the retroactive election by comparing the tax benefit of immediate § 174A deductions (reduced by § 280C(c)(2) if § 41 credits were claimed) against continued amortization, accounting for the impact on QBI and the § 199A deduction. — Rev. Proc. 2025-28; IRC § 280C(c)(2); IRC § 199A

  • Deduct all 2025 domestic R&D expenditures immediately on the 2025 return under § 174A; reduce the deduction by any § 41 research credit claimed under § 280C(c)(2). — IRC § 174A; IRC § 280C(c)(2)

  • Capitalize foreign R&D expenditures on the 2025 return over 15 years under § 174(a)(2)(B); § 174A applies only to domestic R&D. — IRC § 174(a)(2)(B)

  • Document domestic vs. foreign R&D allocation with contemporaneous records showing where research activities were performed to support the § 174A deduction. — Treas. Reg. § 1.174-2(a)(1)

🟡 Monitor

  • The 2022 retroactive election deadline (April 15, 2026) has likely closed under the § 6511(a) refund-claim period unless the client filed an extension or paid tax within the two-year lookback. — IRC § 6511(a); Rev. Proc. 2025-28

  • Immediate § 174A expensing reduces QBI (net income) in the year of deduction, which reduces the § 199A deduction subject to W-2 wage and UBIA limitations; the overall tax benefit is positive but smaller for high-income taxpayers. — IRC § 199A(c)(1); IRC § 199A(b)(2)(B)

  • Unamortized § 174 amounts from pre-2022 tax years may be recovered via accelerated method-change procedures (Form 3115) on the 2025 return if the client does not elect retroactive treatment. — Rev. Proc. 2025-28 § 4.02

🟢 FYI (Specialty Practices)

No specialty items this week.

Want this on your own question?

Brief or full Memo — pay per question, no subscription. Every claim cited to primary authority, audit-ready research bundle included with the Memo.

Ask your own question — first Brief is $10