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Abstract

The advent of the computer age has resulted in a significant increase in the investment by businesses in computer hardware and software. The term "hardware" refers to the physical equipment which accepts (input), processes, and prints (output) information received by it. The term "software" refers to the instructions (language) used to direct a computer to perform desired tasks and the documentation (discs, tapes, etc.) on which such instructions are recorded.' Examples of types of software include Basic, Fortran, Cobol, and RPG. This article addresses the tax aspects and planning opportunities associated with the purchases of computer hardware and software.

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