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Feature Film Deduction...is Section 181 still valid in 2024?

I produced an Ultra Low Budget film this year. I am working on the LLC schedule C now. Is the section 181 film deduction still used for this year? Do I need to attach an explanation in forms? I am considering hiring someone at Turbo Tax to help, but so far I just have a few questions and think I can maybe do it myself with a little guidance. I am hoping I can find help here. 

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Feature Film Deduction...is Section 181 still valid in 2024?

According to the IRS Schedule C Instructions for tax year 2024, the section 181 expense is still valid when entering the expense on Line 48 Other Expenses.

Go to IRS Schedule C Instructions for tax year 2024 page 18 - https://www.irs.gov/pub/irs-pdf/i1040sc.pdf#page=18

 

Film and television and live theatrical production expenses. You can elect to deduct costs of certain qualified film and television productions or qualified live theatrical productions. See section 181, for details.

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Feature Film Deduction...is Section 181 still valid in 2024?

According to the IRS Schedule C Instructions for tax year 2024, the section 181 expense is still valid when entering the expense on Line 48 Other Expenses.

Go to IRS Schedule C Instructions for tax year 2024 page 18 - https://www.irs.gov/pub/irs-pdf/i1040sc.pdf#page=18

 

Film and television and live theatrical production expenses. You can elect to deduct costs of certain qualified film and television productions or qualified live theatrical productions. See section 181, for details.

Feature Film Deduction...is Section 181 still valid in 2024?

Do I need to explain that it is 181? I don't see a way to add a form explaining this.

DaveF1006
Expert Alumni

Feature Film Deduction...is Section 181 still valid in 2024?

Yes, Section 181 is still valid for 2024. It allows you to deduct the costs of qualified film, television, or live theatrical productions in the year the expenses are incurred. According to the IRS Schedule C instructions for 2024, you can claim this deduction under "Other Expenses" in a Turbo tax premium or Home and Business return.

 

Yes, you do need to attach a statement to the return as the IRS Interim Rules states. it states, "For each production to which the election applies, a taxpayer should attach a statement to the return for the taxable year in which costs of the production are first paid or incurred stating that the taxpayer is making an election under section 181 and providing the name (or other unique identifying designation) of the production,  the date principal photography commenced (if applicable), the cost paid or incurred for the production during the taxable year, the qualified compensation (as defined in section 181(d)(3)) paid or incurred for the production during the taxable year, and the total compensation paid or incurred for the production during the taxable year. If the taxpayer expects that the total cost of the production will be significantly paid or incurred  in an area specified in section 181(a)(2)(B), the statement also should identify the area and the cost paid or incurred in that area during the taxable year".

 

There are more specific rules listed in the IRS link I provided above. Please read this carefully!!.

 

 

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