There are several tax benefits associated with the production of this film. It is strongly recommended to seek council from their tax advisors on how these may affect the investors.
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Congress approved a federal tax incentive provision to help filmmakers known as Section 181. This allows an investor to fully deduct their investment in the year of capitalization against passive income. MegaBall$ is grandfathered into the provision, so the benefit forever applies, however the benefit has been extended until December 31, 2025.
Section 168 is the alternative for 181, Effective since January 1, 2018, with one difference: the deduction is applied in the year the film is placed into service, which means when the film is shown. An investor may choose either 181 or 168.
Section 199a provides a 20% discount on taxable income returned to the investor. For example, for every $1.00 recieved, the investor pays tax on 80 cents.
NYS offers a tax rebate program, returning 25% of qualified expenditures. The estimated amount for this film is $400,000. These funds shall be returned to the investors in proportion to their investment. These funds are considered taxable income. This benefit may take between 8 months to 1 year to be processed by the State.
New York City
NYC offers a progrma for films made with in the City providing free co-branding advertising. While this does not directly help an investor, it does offer free help in promoting the film.
The combined benefit of these incentives lowers the overall financial risk for investors [some say as much as 40%]. Our lawyer will gladly review the benefits with the investors advisors. It is recommend that potential investors contact their personal advisors to better understand how these benefits may or may not have an affect.
