Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

New Federal Tax Act Gives New Life, and Twists, to Treatment of Film, TV and Stage Productions

By Thomas D. Selz and Bernard C. Topper Jr.
March 01, 2018

Section 181 of the Internal Revenue Code (IRC) was first introduced in 2004 and, with some gaps in time, lasted through its expiration at the end of 2016. It has provided benefits to both producers of movies and television programs (and, for a shorter period of time, to producers of live stage productions) and — under pass-through legal structures such as limited liability companies — to their investors. Now, with the enactment at the end of 2017 of the sweeping new federal tax law, commonly referred to as the Tax Cuts and Jobs Act (the Jobs Act), §181 has been given new life, with a couple of additional benefits and a couple of additional twists.

First: When can the deduction for production costs be taken? Under §181, prior to the Jobs Act, production costs incurred during a year could be deducted for such year if the costs were incurred with a reasonable certainty that the production would be completed (as a practical matter, the year in which funds for the budgeted costs had been fully raised and were beginning to be spent on production costs). That meant that unlike income forecast depreciation (the alternative in effect prior to §181's enactment), costs could be deducted even before a film was released, a television show broadcast or a live stage production had it first paid public performance.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

A Lawyer's System for Active Reading Image

Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.

The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.