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Discussion Forum Index --> Tax Questions --> Depreciation of software
Habari (talk|edits) said:
| 12 March 2007
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| I have a client who purchased business software license costing over $50k (SAP). This software is not readily available to the public. Can he depreciate this for 3 years on his 1120? Or is amortization the only option?
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JR1 (talk|edits) said:
| March 12, 2007
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| I seem to recall that if it is custom or customized, you're in 15 year territory. Otherwise, 3.
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Riley2 (talk|edits) said:
| 12 March 2007
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| If the taxpayer assumed the risks of development, then the costs can be expensed as the costs are incurred under the Sec. 174 R&D rules. If the taxpayer did not assume the risks of development, the Service will allow a 36-month amortization period. See Rev. Proc. 2000-50.
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Anzelc (talk|edits) said:
| 12 March 2007
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| I have a client that has developed a specialized software program for resale to a specific industry. I am under the impression that all costs of development are to be capitalized and amortized over 5 years. As soon as the software is ready for outside licensing I will expense any additional costs.
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