base period
(7) Definitions and special rules For purposes of this subsection— (A) Basic research The term “basic research” means any original investigation for the advancement of scientific knowledge not having a specific commercial objective, except that such term shall not include— (i) basic research conducted outside of the United States, and (ii) basic research in the social sciences, arts, or humanities. (B) Base period The term “base period” means the 3-taxable-year period ending with the taxable year immediately preceding the 1st taxable year of the taxpayer beginning after December 31, 1983 . (C) Exclusion from incremental credit calculation For purposes of determining the amount of credit allowable under subsection (a)(1) for any taxable year, the amount of the basic research payments taken into account under subsection (a)(2)— (i) shall not be treated as qualified research expenses under subsection (a)(1)(A), and (ii) shall not be included in the computation of base amount under subsection (a)(1)(B). (D) Trade or business qualification For purposes of applying subsection (b)(1) to this subsection, any basic research payments shall be treated as an amount paid in carrying on a trade or business of the taxpayer in the taxable year in which it is paid (without regard to the provisions of subsection (b)(3)(B)). (E) Certain corporations not eligible The term “corporation” shall not include— (i) an S corporation, (ii) a personal holding company (as defined in section 542 ), or (iii) a service organization (as defined in section 414(m)(3) ).