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139 STAT. 193 PUBLIC LAW 119–21—JULY 4, 2025 (c) CHANGE IN METHOD OF ACCOUNTING.— (1) IN GENERAL.—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— (A) such change shall be treated as initiated by the taxpayer, (B) such change shall be treated as made with the consent of the Secretary, and (C) such change shall be applied only on a cut-off basis for any domestic research or experimental expendi- tures (as defined in section 174A(b) of such Code (as added by this section) and determined by applying the rules of section 174A(d) of such Code) paid or incurred in taxable years beginning after December 31, 2024, and no adjust- ments under section 481(a) shall be made. (2) SPECIAL RULES.—In the case of a taxable year which begins after December 31, 2024, and ends before the date of the enactment of this Act— (A) paragraph (1)(C) shall not apply, and (B) the change in method of accounting under para- graph (1) shall be applied on a modified cut-off basis, taking into account for purposes of section 481(a) of such Code only the domestic research or experimental expendi- tures (as defined in section 174A(b) of such Code (as added by this section) and determined by applying the rules of section 174A(d) of such Code) paid or incurred in such taxable year but not allowed as a deduction in such taxable year. (d) CLERICAL AMENDMENT.—The table of sections for part VI of subchapter B of chapter 1 is amended by inserting after the item relating to section 174 the following new item: ‘‘Sec. 174A. Domestic research or experimental expenditures.’’. (e) EFFECTIVE DATE.— (1) IN GENERAL.—Except as otherwise provided in this sub- section or subsection (f)(1), the amendments made by this sec- tion shall apply to amounts paid or incurred in taxable years beginning after December 31, 2024. (2) TREATMENT OF FOREIGN RESEARCH OR EXPERIMENTAL EXPENDITURES UPON DISPOSITION.— (A) IN GENERAL.—The amendment by subsection (b)(1)(C)(ii) shall apply to property disposed, retired, or abandoned after May 12, 2025. (B) NO INFERENCE.—The amendment made by sub- section (b)(1)(C)(ii) shall not be construed to create any inference with respect to the proper application of section 174(d) of the Internal Revenue Code of 1986 with respect to taxable years beginning before May 13, 2025. (3) COORDINATION WITH RESEARCH CREDIT.—The amend- ment made by subsection (b)(2)(B) shall apply to taxable years beginning after December 31, 2024. (4) NO INFERENCE WITH RESPECT TO COORDINATION WITH RESEARCH CREDIT FOR PRIOR PERIODS.—The amendment made by subsection (b)(2)(B) shall not be construed to create any inference with respect to the proper application of section 280C(c) of the Internal Revenue Code of 1986 with respect to taxable years beginning before January 1, 2025. Applicability. 26 USC 174A note. 26 USC prec. 161. Applicability. Effective dates. 26 USC 174A note.