Section 181’s Extension to Live Stage Productions Doesn’t Set Clear Path for Producers, Investors

By Christopher A. Cacace, 09/27/2016

At the end of 2015, Congress passed, as part of a large tax extender bill, the Protecting Americans from Tax Hikes Act (PATH), an extension of Section 181 of the Internal Revenue Code.  Section 181 has been available since 2004 to permit expedited deduction of the costs of a film or TV production.  The present version of Section 181 permits an expedited de­duction of a production’s costs up to $15 million ($20 million in certain circum­stances).  Since inception, this has had several sunset provisions, each of which was extended as part of year-end extender bills. The latest for the first time has extended the availability of Section 181 treatment to live stage productions.

This article, which appeared in a recent issue of Entertainment Law & Finance newsletter (an ALM publication), discusses whether this new provision will be helpful to producers of live theatrical productions as they seek to raise funding for their shows.  It was co-written by Thomas D. Selz and Bernard C. Topper, Jr., of New York City law firm Frankfurt Kurnit Klein & Selz PC, and Christopher A. Cacace, Partner-in-Charge, Theater, Media and Entertainment Group, Marks Paneth LLP.

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