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TITLE 26-INTERNAL REVENUE CODE SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 56, 170, 186, 246, 381, 481, 512, 527, 528, 535, 545, 556, 584, 613A, 642, 703, 804. 809, 822, 823, 844, 852, 904, 1212, 1242, 1244, 1247, 1314, 1341, 1351, 1373, 1374, 1402, 6164, 6411, 6501 of this title. § 173. Circulation expenditures Notwithstanding section 263, all expenditures (other than expenditures for the purchase of land or depreciable property or for the acquisi- tion of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical) to es- tablish, maintain, or increase the circulation of a newspaper, magazine, or other periodical shall be allowed as a deduction; except that the deduction shall not be allowed with respect to the portion of such expenditures as, under reg- ulations prescribed by the Secretary, is charge- able to capital account if the taxpayer elects, in accordance with such regulations, to treat such portion as so chargeable. Such election, if made, must be for the total amount of such portion of the expenditures which is so charge- able to capital account, and shall be binding for all subsequent taxable years unless, upon appli- cation by the taxpayer, the Secretary permits a revocation of such election subject to such con- ditions as he deems necessary. (Aug. 16, 1954, ch. 736, 68A Stat. 65; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Pub. L. 94-455 struck out "or his delegate' !n two places following "Secretary". CROSS REFERENCES Capital expenditures not ded ictible, see section 263 of this title. Trade or business expenses deductible, see section 162 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1016 of this title. § 174. Research and experimental expenditures (a) Treatment as expenses (1) In general A taxpayer may treat research or experi- mental expenditures which are paid or in- curred by him during the taxable year in con- nection with his trade or business as expenses which are not chargeable to capital account. The expenditures so treated shall be allowed as a deduction. (2) When method may be adopted (A) Without consent A taxpayer may, without the consent of the Secretary, adopt the method provided in this subsection for his first taxable year- (I) which begins after December 31, 1953, and ends after August 16, 1954, and (i) for which expenditures described in paragraph (1) are paid or incurred. (B) With consent A taxpayer may, with the consent of the Secretary, adopt at any time the method provided in this subsection. (3) Scope The method adopted under this subsection shall apply to all expenditures described in paragraph (1). The method adopted shall be. adhered to in computing taxable income for the "taxable year and for all subsequent -tax- able years unless, with the approval of the Secretary, a change to a different method is authorized with respect to part or all of such expenditures. (b) Amortization of certain research and experimen- tal expenditures (1) In general At the election of the taxpayer, made In ac- cordance with regulations prescribed by the Secretary, research or experimental expendi- tures which are- (A) paid or incurred by the taxpayer in connection with his trade or business, (B) not treated as expenses under subsec- tion (a), and (C) chargeable to capital account but not chargeable to property of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) or section 611 (relating to allowance for depletion), may be treated as deferred expenses. In com- puting taxable income, such deferred ex- penses shall be allowed as a deduction ratably over such period of not less than 60 months as may be selected by the taxpayer (begin- ning with the month in which the taxpayer first realizes benefits from such expendi- tures). Such deferred expenses are expendi- tures properly chargeable to capital account for purposes of section 1016(a)(1) (relating to adjustments to basis of property). (2) Time for and scope of election The election provided by paragraph (1) may be made for any taxable year beginning after December 31, 1953, but only if made not later than the time prescribed by law for filing the return for such taxable year (including exten- sions thereof). The method so elected, and the period selected by the taxpayer, shall be adhered to in computing taxable income for the taxable year for which the election is made and for all subsequent taxable years unless, with the approval of the Secretary, a change to a different method (or to a differ- ent period) is authorized with respect to part or all of such expenditures. The election shall not apply to any expenditure paid or incurred during any taxable year before the taxable year for which the taxpayer makes the elec- tion. (c) Land and other property This section shall not apply to any expendi- ture for the acquisition or improvement of land, or for the acquisition or improvement of property to be used in comection with the re- search or experimentation and of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) § 173 Page 178