OBAMA, 181, AND FILM PRODUCTION
Submitted with the caveat that he’s not an expert on tax law, producer Noah Harlan sent the below comment about possible effects of the Obama election on film production incentives.
It might be worth noting one of the interesting implications of the election for the film business. The bailout package passed last month included an extension of the section 181 provisions of the federal tax code that allowed investors in qualifying US films to take their investment as an expense against income. For most investors (except those that were full-time film investors) it is specifically against passive income (capital gains). A key piece of Obama’s tax plan is an increase in the capital gains rate from 15% to 20% for large investors. If he succeeds in changing that rate AND 181 remains in effect (it’s a one year extension at the moment) then it just became 30% better for people to invest in film.
Any tax attorneys out there who can comment further?