26 U.S.C. § 181 : US Code - Section 181: Treatment of certain qualified film and television productions

Search 26 U.S.C. § 181 : US Code - Section 181: Treatment of certain qualified film and television productions

(a) Election to treat costs as expenses
(1) In general
A taxpayer may elect to treat the cost of any qualified film or
television production as an expense which is not chargeable to
capital account. Any cost so treated shall be allowed as a
deduction.
(2) Dollar limitation
(A) In general
Paragraph (1) shall not apply to any qualified film or
television production the aggregate cost of which exceeds
$15,000,000.
(B) Higher dollar limitation for productions in certain areas
In the case of any qualified film or television production
the aggregate cost of which is significantly incurred in an
area eligible for designation as -
(i) a low-income community under section 45D, or
(ii) a distressed county or isolated area of distress by
the Delta Regional Authority established under section 2009aa-
1 of title 7, United States Code,
subparagraph (A) shall be applied by substituting "$20,000,000"
for "$15,000,000".
(b) No other deduction or amortization deduction allowable
With respect to the basis of any qualified film or television
production to which an election is made under subsection (a), no
other depreciation or amortization deduction shall be allowable.
(c) Election
(1) In general
An election under this section with respect to any qualified
film or television production shall be made in such manner as
prescribed by the Secretary and by the due date (including
extensions) for filing the taxpayer's return of tax under this
chapter for the taxable year in which costs of the production are
first incurred.
(2) Revocation of election
Any election made under this section may not be revoked without
the consent of the Secretary.
(d) Qualified film or television production
For purposes of this section -
(1) In general
The term "qualified film or television production" means any
production described in paragraph (2) if 75 percent of the total
compensation of the production is qualified compensation.
(2) Production
(A) In general
A production is described in this paragraph if such
production is property described in section 168(f)(3).
(B) Special rules for television series
In the case of a television series -
(i) each episode of such series shall be treated as a
separate production, and
(ii) only the first 44 episodes of such series shall be
taken into account.
(C) Exception
A production is not described in this paragraph if records
are required under section 2257 of title 18, United States
Code, to be maintained with respect to any performer in such
production.
(3) Qualified compensation
For purposes of paragraph (1) -
(A) In general
The term "qualified compensation" means compensation for
services performed in the United States by actors, directors,
producers, and other relevant production personnel.
(B) Participations and residuals excluded
The term "compensation" does not include participations and
residuals (as defined in section 167(g)(7)(B)).
(e) Application of certain other rules
For purposes of this section, rules similar to the rules of
subsections (b)(2) and (c)(4) of section 194 shall apply.
(f) Termination
This section shall not apply to qualified film and television
productions commencing after December 31, 2008.