Does anyone have any experience with IRS Section 181? Is it legit? Does it automatically raise audit questions for the investor? Any adverse results to share?

Forum|Forum|3 years ago
February 14, 2023
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TurboTax Deluxe Online

JosephS1

While I have not myself invested in film rights, etc., in many years, Section 181 is legit. The question becomes are you the primary investor? Purchasing a partnership interest as a limited partner in perhaps something like a Silver Screen Partnership, LLC? A different type of investor? There is generally no additional audit risk as long as the proper reporting is done and the proper disclosures are made to the partners, shareholders, IRS, etc.

I have given you links to 2 items that may be of interest to you, including the actual code section via the Bloomberg Tax site

Film Production Costs

Section 181

@mosh375352

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mosh375352Author

Thanks very much.

I read this article and it seems much less encouraging. I'm just not sure how to figure out the hard and fast rules for things like income source and potentially leveraging the investment with debt ... in case you or others have knowledge on those topics.

Thanks!