It is April 28, 2026. The confusion surrounding Section 174 capitalization has finally been cleared by the OBBBA. In 2026, you can navigate both the capitalization requirements and the R&D tax credit (Section 41) to create a massive liquidity buffer.
1. Immediate Deduction for Domestic R&E
- The Rule: Domestic research expenses are once again 100% deductible in the year they are incurred. However, foreign research (even if remote) must still be amortized over 15 years.
- The Strategy: Shift your AI development team to US-based nodes (Article #550) to unlock immediate write-offs.
- The Shark Insight: “If you’re paying developers in Eastern Europe or Asia, you’re losing. The 15-year amortization kills your cash flow. By ‘Onshoring’ your compute and dev-ops, you turn a long-term liability into a current-year tax shield. This is the Article #562 (Catch-Up Deduction) maneuver in action.”