Section 181 Deduction

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Message Board Section 181 Deduction

This topic contains 3 replies, has 2 voices, and was last updated by Sandy Weiner 1 week, 3 days ago.

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  • #157838
    Scott Haghverdian
    Participant

    Based on Spidell’s 2018/2019 Federal and California Tax Update Seminar (Version 1) it states that Application of qualified film, television, and live theatrical productions now fall under IRC Section 168K -bonus depreciation. It states that Section 181 has been terminated but the Internal Revenue Code does not show this section as repealed or terminated. Also, when checking the code of federal regulations, none of Sections 1.181-0 through 1.181-6 have been repealed or terminated. Please advise if Section 181 is still active to your knowledge and if we are still able to rely on that code section.

  • #157857
    Sandy Weiner
    Participant

    IRC Sec. 181 does not apply to productions commencing after 2017.

    IRC Sec. 181(g) reads:
    (g) Termination
    This section shall not apply to qualified film and television productions or qualified live theatrical productions commencing after December 31, 2017.

    To date this has not been extended.

  • #157861
    Scott Haghverdian
    Participant

    The production that we are dealing with began in 2016, so would Section 181 apply to it?

  • #158031
    Sandy Weiner
    Participant

    It should. Just to be clear, a film or television production commences on the first date of principal photography and a theatrical production commences on the date of the first public performance before a paying audience