Do I use half year convention for R&D expenses for 1st year business

[Fat Poutine]

I started  a business in July and officially incorporated in Oct 2022, and I have 100k in R&D salary. 

I have read that I am supposed to use half year convention. Does that mean I should put 6/30/2022 as start date for the 100k so it will come out as 10k for depreciation expense? Wouldn't that look odd because  my business starts in July? Or should I use mid-quarter convention, then group the salary by quarter?

Also, for R&D equipments, should I choose "Other" for Amortizable Intangible property? or "Tools and Machinery? I found that when I choose Machinery, the depreciation will be unevenly distributed over future years and not straightline, and I thought we are supposed to use straightline for R&D expenses? 

Thanks for your help. I just find this part of the return confusing. 

[Mike9241]

R&D Costs Incurred 2022 and Later
Starting in 2022, taxpayers are no longer allowed to currently deduct R&D expenditures. Instead, they have to amortize (deduct) them over five tax years, beginning with the midpoint of the tax year in which the specified research or experimental expenditures are paid or incurred. R&D expenses incurred outside the United States must be deducted over 15 years. In Turbotax type is L - amortizable intangibles and the code section is 174

Tax Credit for R&D Expenses
In addition to a tax deduction for R&D expenses, a tax credit is available. Unlike a deduction, which only reduces taxable income, a tax credit is a dollar-for-dollar reduction in the amount of tax that must be paid. The R&D credit is complex. The amount of the credit is based on how much a taxpayer has increased its R&D expenses over a base period. Small businesses and start-up companies typically claim an alternative simplified credit. With this method, their credit is equal to 14% of the amount current-year R&D expenses exceed 50% of the average spent in the previous three years.

Small and start-up businesses also have the option of applying the credit to offset their Social Security payroll tax payments instead of their income taxes. Up to $250,000 per year in Social Security payments for up to five years can be offset with the credit. This option is available only for businesses with less than $5 million in gross receipts and with no more than five years of gross receipts.

If both the R&D credit and tax deduction are claimed, the deduction is reduced by the amount of the credit. The credit is claimed on IRS Form 6765.

see this for definitions 

https://www.law.cornell.edu/cfr/text/26/1.174-2 

[MarilynG1]

If you had R&D expenses prior to starting your Business, you can claim up to 5K as Start Up Expenses the first year.  The balance can be depreciated as Amortizable Intangibles, as you suggested.  If you choose start-up costs in this section, you don't have to choose a convention.  These are amortized over 15 years. 

Here's more details on Entering Business Start Up Costs. 

An asset is property you acquire to help produce income for your business (equipment/machinery, etc.). For tax purposes, there are six general categories of non-real estate assets.  Each has a designated number of years over which assets in that category can be depreciated. Here are the most common ones:

• Three-year property (including tractors, certain manufacturing tools, and some livestock)
• Five-year property (including computers, office equipment, cars, light trucks, and assets used in construction)
• Seven-year property (including office furniture, appliances, and property that hasn't been placed in another category)

Here's detailed info on Depreciation of Business Assets to help you. 

When you set up your Business Assets your first year, you are presented with several options (screenshot).