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"Ron Wanttaja" <ron.wanttaja@comcast.net> wrote in message
news:1pmvc2lrcr9ctgttfbcgb4kcols7vbl307@4ax.com...
> On Tue, 1 Aug 2006 21:44:10 GMT, "Ken Finney"
> <kenneth.c.finney@boeing.com>
> wrote:
>>
>> I'm guessing that for tax purposes, calling it a "proof of concept" is
>> better than calling it a "prototype".
>
> Don't know why it would make a difference, tax-wise.
>
> My guess is that it's a combination of factors. "Prototype" implies it is
> the
> first aircraft of a series of aircraft, and Cessna may not yet have Board
> of
> Directors' approval to start production.
>
> Also, if major changes have to be made (such as a switch to another
> engine), the
> "spin control" is easier with a "Proof of Concept." Big changes between
> the
> "Prototype" and the production aircraft implies some faulty decisions
> during the
> design process, but if you call it a "Proof of Concept" you can just
> claim,
> "Well, we were just trying different ideas, pushing the envelope, that
> sort of
> thing." Then you build a "prototype" that closely matches the production
> model.
>
> Ron Wanttaja
I live for tax law, but I have never owned a manufacturing company. ;^)
I am guessing that a "proof of concept" is research and development, and
therefore deductable in the year it occurs, whereas the tooling etcetera for
a prototype would have to be amortized over time.
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Re: Rec.Aviation OSH report
