4 ms·
This isn't how tax write-offs work. The expenditures in the production of a film or TV series are always deducted from taxable net income regardless of whether
by nickelpro 3y ago
This isn't how tax write-offs work. The expenditures in the production of a film or TV series are always deducted from taxable net income regardless of whether the final product is released or not.
There are a plethora of reasons not to release a creative work. For example, you don't want to spend any more money on music licensing, editing, marketing, etc, that is unlikely to be recouped.
"Tax write-offs" simply isn't one of them
- aqme28 3y agoI know this is derailing the main thread, but then why are studios choosing not to release finished movies on streaming? It seems like they could recoup at least some of the expenses compared to just shelving the thing forever.
- nickelpro 3y agoThey're either: A) Not as finished as being represented by media, and the costs associated with finishing them exceed the likely value of the finished product B) The studio views the finished product as being of marginal value and damaging to their brand
- bobsmooth 3y agoThere have been multiple completed works that have been canceled for tax reasons. https://deadline.com/2023/01/as-tv-turns-to-tax-write-offs-top-showrunner-details-betrayal-of-scrapped-shows-1235215154/ https://deadline.com/2023/01/as-tv-turns-to-tax-write-offs-t...
- nickelpro 3y agoThe source for that is two-season showrunner for a CW drama. Also, this isn't a debate. The US tax code isn't something that's decided by CW showrunners.
- nradov 3y agoYou really shouldn't take fake news organizations like CNN seriously on issues like this. They obviously didn't do even basic fact checking with a real tax accountant or lawyer.
- evilfred 3y ago[flagged]
- akgoel 3y agoCertain expenses will be capitalized while the film is available for release/streaming. Depreciation/amortization will be years for the life of the film. But if you scrap it right away, you can deduct those expenses immediately.
- fny 3y agoIt’s actually only 5 years, not for the life of the film.
- deleted 3y ago[deleted]
- nickelpro 3y agoYes, but the reason to do this is that the film is ultimately going to cost more money than it is worth, or the gross represents a rounding error on the studio's balance sheet. You wouldn't capitalize the expenses of a film that was expected to recoup any meaningful amount of money on release. Either the thing is already costing you more money than it is worth or is a brand risk, thus you look for a way to get out as painlessly as possible.
- jedberg 3y agoThey need the money now, they can't wait to depreciate it over time.
- nickelpro 3y agoIf the film was going to recoup at least the $10-$20M they'll save in taxes that FY they would release it. The point is the property is worth negative or trivial value already. Either it's going to cost more to finish than it's worth, or it's worth next to nothing.
- anonymouskimmer 3y ago> For example, you don't want to spend any more money on music licensing, editing, marketing, etc, that is unlikely to be recouped. I have no idea what "Max" is in the GP, but another big reason to not release a creative work is if audience feedback was negative enough that even releasing it for free would hit the value of your brand.
- wouldbecouldbe 3y agoIt is though, I definitely had project not-launched which had expenses that accountants found much harder to justify then launched projects. Taxes isn't a hard science but a soft one, and when talking to a tax officer, as far as my limited knowledge goes, launching a product or movie does help to ease their fraud suspicions.
- granzymes 3y agoYou also need to pay residuals to the writers / actors when people watch the show. If you never release it to audiences you don’t need to pay.