[murdockq]

I've heard that many of the big tech layoffs where actually just moved / converting them to contracting groups, so they lose the direct head count but kept the developer via the intermediary. Have others heard this too and could this have been a way to label contractors differently so they don't fall under this tax code?

[walterbell]

Which entity typically owns a software asset created by contracted developers?

[andrewlgood]

Some firms use proprietary software to run their business. The development costs of that development may be eligible to be capitalized under Section 174. The idea is to make it similar to if they simply bought software off the shelf which they would be allowed to capitalize.

Before someone mentions Excel, most firms have a threshold the expense has to clear before it is considered for capitalization. Excel is under most firm’s threshold.