[stult]

> In the case of the $200k engineer, you deduct the first $40k in the first year, then you can expense another $40k from that first year in the second year, the third $40k in the third year, and so on through the fifth year. So eventually you get to expense the entire first year of the engineer's pay, but only after five years.

This actually understates the issue slightly. The amortization is calculated from the midpoint of the first tax year, so actually you only take 10% in the first year. Meaning it takes six years to get back to square one. In your example, you would only capitalize $20k in the first year, $40k for the subsequent four years, and then another $20k in the final year.