101–110 of 369 posts
I wonder what would happen if a bunch of extremely bankable talent - the Christopher Nolan, Greta Gerwig, Tom Cruise crowd - quietly got in touch with Warner Bros and made it clear that they would avoid working with any studio that had a track record of cancelling completed projects for a tax write-off.
Commenting before I've read the article: That's ridiculous. There's no obligation for anyone to bring something to market regardless of how far along it is. After I read the article: Still not persuaded. It reads like motivated reasoning, the person doesn't like things not getting released and says that governments should step in. There's some mention of taxes and lost work, but nothing tht holds water. As an example…
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Destroying a movie to claim the tax break is analogous to burning your house down for the insurance money or to claim a casualty loss. Yes, you really did lose your house. No, you are not entitled to claim it as a write-off.
>insurance money That's fraud because the insurance policy specifically says it won't pay out if you intentionally set it on fire. If you actually did set it on fire, then claimed that you didn't then that's the deception. >No, you are not entitled to claim it as a write-off. Can you point to the relevant tax law that prevents this?
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> That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded. Did they not incur such losses? Did they claim to delete the movie but actually kept a backup? Granted, the loss is self-inflicted, but that's not a relevant factor in the tax code.
We aren't arguing that it's tax fraud by definition, but that it should be considered fraud. If the tax code incentivizes destroying something then that seems like a defect of the tax code.
> "fraud" doesn't mean "losing money in a manner I don't like", so I ask again: where's the deception here?
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> That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded. Did they not incur such losses? Did they claim to delete the movie but actually kept a backup? Granted, the loss is self-inflicted, but that's not a relevant factor in the tax code.
Destroying a movie to claim the tax break is analogous to burning your house down for the insurance money or to claim a casualty loss. Yes, you really did lose your house. No, you are not entitled to claim it as a write-off.
Where do you draw the line? If an artist pays a model and paints her, is the artist to be prohibited from destroying the painting because it sucks, and because the model wants credit? What about a music producer who pays a studio band to record a song that turns out to be terrible -- is the producer prohibited from deleting it? It's the tax write off for destruction that's fucked up, as @cnees says. Failures are part…
Where do you draw the line? If someone buys the Mona Lisa and burns it for the tax credit, is the owner to be prohibited from doing so based on the public interest?
This is not how taxes work.
If I buy the Mona Lisa for $100 and burn it for the tax credit. That would only yield me a $100 deduction so a savings of $46 in taxes (and I live in the most tax heavy portion of the US for purposes of my example).
So I would lose $54 in your example. Why would anyone do this?
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I don't think they need to claim that "no one would pay even $1 for the rights to the movie in its current state" but rather the lesser "in our judgment, the best thing for us as a profit-seeking studio is for us to not release this movie". Damage to the Batgirl franchise brand, damage to the studio reputation, damage to the relationship with the stars, legal fees, etc. could all be reasonably factored in to the stud…
You are confusing "not releasing it" with "claiming a value of zero."
It's no different from having a stock position in a company that's in limbo. You can't claim the tax loss and keep the position. You have to get the clearinghouse to take the position for $0 in order to claim the loss.
The studio's position is that they've already incurred the loss; now they're taking the action necessary to recognize the loss on their taxes.
Where do you draw the line? If an artist pays a model and paints her, is the artist to be prohibited from destroying the painting because it sucks, and because the model wants credit? What about a music producer who pays a studio band to record a song that turns out to be terrible -- is the producer prohibited from deleting it? It's the tax write off for destruction that's fucked up, as @cnees says. Failures are part…
> It's the tax write off for destruction that's fucked up How so? They aren’t selling it. So its value is $0. If the artist burns the painting, its value is $0. Is it bad because the artist could have sold it and chose not to? And it’s not fraud, because if the studio ever chooses to sell, they will pay taxes on 100% since they already deducted all expenses. I’m not really sure what you’re arguing. What’s the alterna…
If its value is $0, I should be able to buy it for that price.
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>insurance money That's fraud because the insurance policy specifically says it won't pay out if you intentionally set it on fire. If you actually did set it on fire, then claimed that you didn't then that's the deception. >No, you are not entitled to claim it as a write-off. Can you point to the relevant tax law that prevents this?
There is no law that specifically prevents it, just as there is no law the specifically prevents you from deducting, say, money that you pay to buy groceries. What there is is a very long list of things you can deduct, and grocery money, and losses that you suffer from willful destruction of your own property, are not on that list.
Actually if you read the sibling comment[1], such list of "things you can't deduct" does exist, albeit it's seemingly for personal taxes.
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If I pay 25% marginal income tax and I make a profit of 200 million dollars, I get to keep 150 million. If instead I decide to buy the Mona Lisa for 200 million dollars, and burn it I walk away with nothing but the satisfaction of not have given one cent to the government. Please tell me how my evil mastermind plan to burn the Mona Lisa works anyway?
Buying the Mona Lisa for $200m is not at all the same thing as netting a $200m profit. Better analogy: you buy a big museum collection that contains some lost Rembrandt paintings, widely regarded as his worst, but still considered valuable because it's Rembrandt. You think you might have a hard time selling them, so you look up their original purchase price and find that it was $1 million, so you burn them instead an…
It only works if you pay $1M now and then years later burn them to offset a different $1M in income. But that would still be stupid as you’re better off selling them for $1M than burning.
I don’t think you’re thinking the math through properly.
Studios aren’t writing these off because they are stupid or scheming. They are writing them off because they can’t sell them.