Tax Incentive for Film and Television Producers – Section 181 Renewed

The fiscal cliff legislation signed by President Obama extends Section 181 of the Tax Code.  Section 181 allows filmmakers and television producers to elect to take an immediate tax deduction for productions costing up to $15 million ($20 million if the production occurs in a qualifying low-income area) in the year the costs are incurred (as opposed to capitalizing the costs and depreciating them over time). The extension of Section 181 makes the deduction available for productions commenced in 2013 and also applies retroactively for productions commenced in 2012.

The extension of Section 181 is also relevant to film investors, as the Code provision enables investors in low budget films to write off their investment as a loss in the year their investment is made.

This article is intended only as a general discussion of these issues. It is not considered to be legal advice or relied upon. We would be pleased to consider providing additional details or advice about specific situations. For additional information on this topic, please feel free to contact Nicole Page who regularly counsels clients on entertainment, media and intellectual property matters.

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