Today President Bush signed into law H.R. 3221, the Housing and Economic Recovery Act of 2008.

Section 3081 of the Act allows certain taxpayers to accelerate R&D and AMT credit carryovers by electing to trade current year bonus depreciation for pre-2006 R&D and AMT credits.

As it relates to the R&D tax credit, practitioners should note that this provision is primarily of interest to C corporations with pre-2006 R&D credit carryforwards that they cannot currently use and who have also invested currently in machinery and equipment, qualifying leasehold improvements, or nonstructural building components. These corporations can elect to claim straight-line depreciation instead of the accelerated and bonus depreciation for eligible property purchased and originally used between April 1, 2008 and December 31, 2008. Up to twenty percent of the difference between the bonus and accelerated depreciation and straight-line depreciation can be used to increase the R&D credit limitation, further limited to the lesser of $30 million or six percent of the dollar value of the pre-2006 R&D credit carryforwards.

This provision will benefit C corporations that have R&D credit carryforwards that they can no longer use, such as formerly profitable manufacturers with large R&D credit carryforwards or high tech start-up companies.

SourceCorp has a national Research & Development practice with the required knowledge and expertise to meet IRS requirements for R&D Tax Credit Studies. We have a strong commitment to quality and are proud to lead the field in IRS-accepted studies. SourceCorp understands that any good business decision is based on the cost versus the benefit received. Our client/partners recognize the combination of value and quality they receive, which results in a tremendous amount of repeat business. With completed studies resulting in the permanent difference of more than $50 million in taxes for our clients, SourceCorp has earned an unparalleled reputation as the highest quality provider in the R&D Tax Credit industry.

Click here for a free R&D Tax Credit Estimate

About SourceCorp:
Celebrating our 25th year in business, SourceCorp specializes in Green Building Tax Deductions, LIFO Accounting, R&D Tax Credit Studies, and Cost Segregation Studies. With a team of nearly 70 professionals and with offices located throughout the country, SourceCorp helps clients realize unparalleled experience, services, and trust. SourceCorp serves many of the nation’s most prominent CPA firms, Associations, and Fortune 1000 companies. For more information, please call 817.732.5494 or visit www.SourceCorpTax.com.

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