- 52 -
(B) which is undertaken for the purpose of
discovering information--
(i) which is technological in
nature, and
(ii) the application of which is
intended to be useful in the development of a
new or improved business component of the
taxpayer, and
(C) substantially all of the activities
of which constitute elements of a process of
experimentation for a purpose described in
paragraph (3).
* * * * * * *
(2) Tests to be applied separately to each business
component.--For purposes of this subsection--
(A) In general.--Paragraph (1) shall be
applied separately with respect to each
business component of the taxpayer.
(B) Business component defined.--The
term "business component" means any product,
process, computer software, technique,
formula, or invention which is to be--
(i) held for sale, lease, or
license, or
(ii) used by the taxpayer in a trade
or business of the taxpayer.
* * * * * * *
(3) Purposes for which research may qualify for
credit.--For purposes of paragraph (1)(C)--
(A) In general.--Research shall be
treated as conducted for a purpose described
in this paragraph if it relates to--
(i) a new or improved function,
Page: Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 NextLast modified: May 25, 2011