Navigating the Latest Section 174 R&D Capitalization Rules: What Founders Need to Know in 2025
Shay CPA
FEBRUARY 10, 2025
million in grant income in 2024 (accrual accounting). This can create a significant, unexpected tax liability, even if the startup has no commercial revenue. While Section 174 costs still must be capitalized, accrual accounting often reduces mismatches compared to the cash method for grant-funded research.
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