The R&D tax impact will NOT even out. its taxes you pay for 5 years that you don't get back. R&D tax credits is a small right-off and not worth the efforts. Lots of startups don’t even do the R&D tax credits because of the cost and time evolved to do all the necessary records, backups and reports.

I still need help understanding this new Tax rule. I might understand capital assets better if you could answer these two questions.

We pay software developers to create a new product. We spend $1m on their wages, then sell that software product for $1.1m. How much federal tax would I owe based on this new tax rule?

We buy a machine for $1m and then sell it for 1.1m. How much federal taxes would I owe?

Question: this last year I paid software developers to create a new product, spent $1,000,000 on their wages, then I turned around and sold that software product for $1,000,000. I made no profit on this product. How much federal taxes would I owe based on this new tax rule?