Preferences

Because it's not about the lifetime of the person creating the software, it's about the lifetime of the software created during employment. The created asset can be used indefinitely after the employee has left. The salary is now considered the capital investment to create the asset.

At least that's now how the IRS sees it. Similar to buying machines to create a physical product.

Maybe they read all these articles about developers working in a feature factory.


jrockway
The IRS should do a code review and see. That script you wrote at 3:00AM after waking up to your pager? That thing is going to be around forever and will have to be amortized over the next 2000 years. 5 years, you're getting off easy ;)
dakna OP
I expect that there will be some sort of code reviews by software experts in the future during a large scale tax audit. Because there is a distinction between regular software maintenance (including diagnosing and debugging) and an actual upgrade or enhancement. So it's not like you just capitalize 100% of the salary, unless it is clearly a support role. But even for testing and quality control, they make a distinction between before and after putting the software into service.

This item has no comments currently.