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Can I capitalize this year's R&D?

Generally, R&D costs cannot be capitalized for U.S. financial statements according to the Statement of Financial Accounting Standards No. 2, Accounting for Research and Development Costs. The original pronouncement can be viewed at www.FASB.org/st.

We are not able to address the second part of your question, which involved the R&D costs on the income tax returns. You will need to ask an income tax adviser or do a search on www.IRS.gov regarding the capitalization of R&D costs for income tax purposes.