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139 STAT. 192 PUBLIC LAW 119–21—JULY 4, 2025 ‘‘(1) IN GENERAL.—The domestic research or experimental expenditures (as defined in section 174A(b)) otherwise taken into account as a deduction or charged to capital account under this chapter shall be reduced by the amount of the credit allowed under section 41(a).’’. (3) AMT ADJUSTMENT.—Section 56(b)(2) is amended— (A) in subparagraph (A)— (i) by striking ‘‘or 174(a)’’ in the matter preceding clause (i) and inserting ‘‘, 174(a), or 174A(a)’’, and (ii) by striking ‘‘research and experimental expenditures described in section 174(a)’’ in clause (ii) thereof and inserting ‘‘foreign research or experimental expenditures described in section 174(a) and domestic research or experimental expenditures in section 174A(a)’’, and (B) in subparagraph (C), by inserting ‘‘or 174A(a)’’ after ‘‘174(a)’’. (4) OPTIONAL 10-YEAR WRITEOFF.—Section 59(e)(2)(B) is amended by striking ‘‘section 174(a) (relating to research and experimental expenditures)’’ and inserting ‘‘section 174A(a) (relating to domestic research or experimental expenditures)’’. (5) QUALIFIED SMALL ISSUE BONDS.—Section 144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ and inserting ‘‘174A(a)’’. (6) START-UP EXPENDITURES.—Section 195(c)(1) is amended by striking ‘‘or 174’’ in the last sentence and inserting ‘‘174, or 174A’’. (7) CAPITAL EXPENDITURES.— (A) Section 263(a)(1)(B) is amended by inserting ‘‘or 174A’’ after ‘‘174’’. (B) Section 263A(c)(2) is amended by inserting ‘‘or 174A’’ after ‘‘174’’. (8) ACTIVE BUSINESS COMPUTER SOFTWARE ROYALTIES.—Sec- tion 543(d)(4)(A)(i) is amended by inserting ‘‘174A,’’ after ‘‘174,’’. (9) SOURCE RULES.—Section 864(g)(2) is amended— (A) by striking ‘‘research and experimental expendi- tures within the meaning of section 174’’ in the first sen- tence and inserting ‘‘foreign research or experimental expenditures within the meaning of section 174 or domestic research or experimental expenditures within the meaning of section 174A’’, and (B) in the last sentence— (i) by striking ‘‘treated as deferred expenses under subsection (b) of section 174’’ and inserting ‘‘allowed as an amortization deduction under section 174(a) or section 174A(c),’’, and (ii) by striking ‘‘such subsection’’ and inserting ‘‘such section (as the case may be)’’. (10) BASIS ADJUSTMENT.—Section 1016(a)(14) is amended by striking ‘‘deductions as deferred expenses under section 174(b)(1) (relating to research and experimental expenditures)’’ and inserting ‘‘deductions under section 174 or 174A(c)’’. (11) SMALL BUSINESS STOCK.—Section 1202(e)(2)(B) is amended by striking ‘‘which may be treated as research and experimental expenditures under section 174’’ and inserting ‘‘which are treated as foreign research or experimental expendi- tures under section 174 or domestic research or experimental expenditures under section 174A’’. Reduction.