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> 26 U.S. Code § 174(c)(3):

> (3) Software development

>

> For purposes of this section, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure.

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My guess is they'll treat it like repairs and improvements on physical equipment. Fix a broken calculation, that's opex. Add an API for better Google integration, that's capex.

That's not how that works. The law is pretty explicit.

How is the IRS defining "development"?

I don't think it's the same as we do, and more akin to land development and improvement.

I think that will actually be decided by IRS interpretation. I can’t imagine an administrative judge would have that narrow a view, given the way other assets are treated.

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