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131 STAT. 2112 PUBLIC LAW 115–97—DEC. 22, 2017 by the taxpayer during such taxable year in connection with the taxpayer’s trade or business. ‘‘(c) SPECIAL RULES.— ‘‘(1) LAND AND OTHER PROPERTY.—This section shall not apply to any expenditure for the acquisition or improvement of land, or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) or sec- tion 611 (relating to allowance for depletion); but for purposes of this section allowances under section 167, and allowances under section 611, shall be considered as expenditures. ‘‘(2) EXPLORATION EXPENDITURES.—This section shall not apply to any expenditure paid or incurred for the purpose of ascertaining the existence, location, extent, or quality of any deposit of ore or other mineral (including oil and gas). ‘‘(3) SOFTWARE DEVELOPMENT.—For purposes of this sec- tion, any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure. ‘‘(d) TREATMENT UPON DISPOSITION, RETIREMENT, OR ABANDON- MENT.—If any property with respect to which specified research or experimental expenditures are paid or incurred is disposed, retired, or abandoned during the period during which such expendi- tures are allowed as an amortization deduction under this section, no deduction shall be allowed with respect to such expenditures on account of such disposition, retirement, or abandonment and such amortization deduction shall continue with respect to such expenditures.’’. (b) CHANGE IN METHOD OF ACCOUNTING.—The amendments made by subsection (a) shall be treated as a change in method of accounting for purposes of section 481 of the Internal Revenue Code of 1986 and— (1) such change shall be treated as initiated by the tax- payer, (2) such change shall be treated as made with the consent of the Secretary, and (3) such change shall be applied only on a cut-off basis for any research or experimental expenditures paid or incurred in taxable years beginning after December 31, 2021, and no adjustments under section 481(a) shall be made. (c) CLERICAL AMENDMENT.—The table of sections for part VI of subchapter B of chapter 1 is amended by striking the item relating to section 174 and inserting the following new item: ‘‘Sec. 174. Amortization of research and experimental expenditures.’’. (d) CONFORMING AMENDMENTS.— (1) Section 41(d)(1)(A) is amended by striking ‘‘expenses under section 174’’ and inserting ‘‘specified research or experi- mental expenditures under section 174’’. (2) Subsection (c) of section 280C is amended— (A) by striking paragraph (1) and inserting the fol- lowing: ‘‘(1) IN GENERAL.—If— ‘‘(A) the amount of the credit determined for the taxable year under section 41(a)(1), exceeds 26 USC prec. 161. 26 USC 174 note. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00060 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS