Can you net it with the expense so that it reduces the expense but doesn't increase the total income?
I have seen some CPAs just account for the grant as "Grant income" even though it is supposed be a reimbursement. However, that becomes a problem for R&D expenses. This year we are supposed to capitalize our new spending and depreciate only 10% of it...
For example, I have 100k in R&D salary of which 30k is reimbursed by a grant, can I reduce the salary expense 30k so I can capitalize the remaining amount (70k)?
Or, do I need to report 30k as income, expense only 10k in depreciation, therefore have a 20k taxable income (?!)
