How/where do I deduct a $ investment in an upcoming independent film when I don't have any income associated with the film? Thanks.

[ak_mrtn]

Section 181 of the tax code

[Cynthiad66]

Section 181 Film Production Expenses would be reported as a Business Expense on Schedule C.

The easiest way to find Schedule C in TurboTax is to open your return and use the Search box at the top right side of the TurboTax header. Enter "schedule c", hit Enter, then click on "jump to Schedule C". This will take you directly to the start of this section where you can set up your business and enter your income & expenses.

Or go to My Account >> Tools >> Topic Search. Type in "schedule c", click the topic in the list, then click "GO".

(If you are using the mobile app and don't have My Account or Tools on your screen, try logging into TurboTax from a laptop or desktop browser.)

You will be prompted to upgrade, if necessary, to the TurboTax version that is best for your tax situation.

[ak_mrtn]

I have ZERO income to put in.  I am just an investor - I literally wrote a check - does this even qualify for a deduction?

[ak_mrtn]

It's asking me to put in income into the 1099 MISC or NEC...I can't just put in expenses.

[ThomasM125]

I assume what you mean is that you are a partner in a joint venture and intend to earn a return on your investment? If so, then the partnership should complete a partnership tax return, form  1065, and furnish you with a K-1 form that will report your share of partnership income or loss and other related tax items. You use the form k-1 to report the partnership tax items on your personal tax return.

If on the other hand you simply loaned money to the venture, and it will be paid back with interest, then you don't report anything until you earn the interest income.

[edgarespina]

Hi there - did you ever figure this out?  I am in the same exact situation this year.

[edgarespina]

@ak_mrtn did you ever figure this out?  I am the same exact situation this year.

[Vanessa A]

Depends on what you mean by investment.  If you are simply a stockholder, then you would not report anything on your return, you would wait until you sold your investment to deduct the cost basis from sales to arrive at your profit.

If this is a start up business, then you would report this on Schedule C as start up costs.  This would then offset your other income. 

[edgarespina]

@Vanessa A I thought that under IRS Section 168 k under the Tax Cuts and Jobs Act allows investors can take a 100% tax deduction for a feature film or television series?

[Vanessa A]

Yes, you are correct, if this is for a Qualified Film or Television Production, then you could enter this on Schedule C as Other Deductions with an attached statement stating your are making the election under IRC section 168.  

However, if this is not a qualified film (ex. You invested in someone making short YouTube videos or a TV series that has been playing for years or a film that will not be released by 2023) you would not be able to take the full deduction under IRC 168.