Film Production Expenses Federal Tax Provision Set to Expire January 1

Posted in Tax News

The federal tax provision for the motion picture and TV industry, called Section 181, is set to expire January 1, 2010.  This incentive allows a production company to deduct up to $15 million in costs of any qualifying film or television production instead of having to capitalize and depreciate such costs over several years.  This can be a major incentive for investors to put money in your project.  However, the deadline was extended once already, and barring any last-minute tax maneuvers, if you don’t start principal photography by January 1, 2010, you’ll have to account for the expenses under the old depreciation rules.