### Question
How does Accounting Periods and Methods of Accounting define independent research and development expenses?


### Answer
Under *26 U.S.C. § 460*, **independent research and development expenses** is defined as:

> any expenses incurred in the performance of research or development, except that such term shall not include—


(A) any expenses which are directly attributable to a long-term contract in existence when such expenses are incurred, or


(B) any expenses under an agreement to perform research or development

#### Citation:
  - *26 U.S.C. § 460*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart B-Taxable Year for Which Items of Gross Income Included**

