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Deleting and destroying finished movies

rogerebert.com

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Re: Deleting and destroying finished movies

#151

Post by s1artibartfast »

gruez wrote: post #148
s1artibartfast wrote: post #147

Earlier quoted context omitted.

It would relieve you of property tax for the house, which is my point. It would also allow you to avoid taxes on the sale of the house.

So you're saying that you can't demolish buildings on your own property (or at least not without rebuilding another of equal value), because that would lead to the city/county getting less taxes? That seems utterly absurd. What's next, not being able to paint the inside of your house puke yellow, which would also tank property values?

I think you misread my initial post.

>nobody is entitled tax revenue. Laws generally support taxes on income/profit, and arent just a bill.

>It isn't illegal to work less and pay less taxes.

>It is absolutely legal to knock down your house so you dont have to pay property or sales tax on it. You are making the same point.

Re: Deleting and destroying finished movies

#152

Post by prepend »

theshrike79 wrote: post #108
prepend wrote: post #96

Earlier quoted context omitted.

> 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…

> How so? They aren’t selling it. So its value is $0. If its value is $0, I should be able to buy it for that price.

That’s not how private property works. The owner doesn’t have to sell to you.

Have you ever had a car totaled? Just because the insurance company salvages your vehicle doesn’t mean you get to buy it for that value.

Re: Deleting and destroying finished movies

#153

Post by sokoloff »

prepend wrote: post #152
theshrike79 wrote: post #108

Earlier quoted context omitted.

> How so? They aren’t selling it. So its value is $0. If its value is $0, I should be able to buy it for that price.

That’s not how private property works. The owner doesn’t have to sell to you. Have you ever had a car totaled? Just because the insurance company salvages your vehicle doesn’t mean you get to buy it for that value.

I agree with your first paragraph, but my experience with the second is that I’ve always been offered it at that figure. (The insurance company is negotiating with you to buy the car from you. They may not want to present it in those terms, but that’s what’s going on. You own it; they have an obligation to you; in some cases, it’s advantageous to all sides for the insurance company to buy the wreckage from you. If they think they can get $X for salvage, it’s cheaper and easier to offer it to you for that; it ends storage fees, avoids transport and selling costs, and in most states avoids them paying sales tax to you on the salvage amount.)

Re: Deleting and destroying finished movies

#154

Post by anon373839 »

Can anyone with an accounting background explain what is actually happening on the books to make this economically advantageous? By forfeiting any revenue on these films, the studio is reducing its tax burden but isn’t it increasing its overall economic loss?

Re: Deleting and destroying finished movies

#155

Post by antasvara »

gruez wrote: post #144
antasvara wrote: post #141

Earlier quoted context omitted.

Did your investment of money in FTX cause it to fail? Because that's what destroying a building is: an intentional choice by a company to destroy an asset that it owns.

What about "destroying all copies of the movie except one, then moving that onto a sd card you got off aliexpress"? Sure, that's a pretty dumb thing to do, but arguably so was investing into FTX.

There are legal definitions of negligence. IANAL, but I'd imagine that what you're describing would meet those definitions.

Investment decisions aren't as easy to diagnose because there's a chance of upside. If FTX didn't end up as a scam, you stand to gain a LOT of money. The same can't be said of putting your only copy of a movie on a crappy SD card.

In addition, you could make the argument that the chances of FTX being a scam were priced in. That is, you're buying stock that accounts for the scam chances.

Re: Deleting and destroying finished movies

#156

Post by lisper »

s1artibartfast wrote: post #135
lisper wrote: post #121

Earlier quoted context omitted.

Every tax dollar you don't pay is a dollar someone else has to pay instead, or a dollar that gets added to the national debt. And burning your house down and writing off the depreciated value is absolutely not legal. > Assuming you burn it in a legal, controlled manner and not arson. Yes, well, that is a might big assumption. I doubt you could point me to a single instance of someone actually burning down their house…

>Every tax dollar you don't pay is a dollar someone else has to pay instead, or a dollar that gets added to the national debt. And burning your house down and writing off the depreciated value is absolutely not legal. nobody is entitled tax revenue. Laws generally support taxes on income/profit, and arent just a bill. It isn't illegal to work less and pay less taxes. It is absolutely legal to knock down your house so…

> It is absolutely legal to knock down your house so you dont have to pay property or mortgage tax on it.

Yes, that's true. But that's not the same thing as claiming the resulting loss as a deduction on your income tax.

Re: Deleting and destroying finished movies

#157

Post by lisper »

s1artibartfast wrote: post #131
lisper wrote: post #36

Earlier quoted context omitted.

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.

nobody is paying the company money. It is closer to burning down your house to avoid property or sales tax.

No, it isn't. If there were a tax on the movie as an asset that would be true, but there isn't so it isn't.

Re: Deleting and destroying finished movies

#158

Post by nerdponx »

s1artibartfast wrote: post #123
nerdponx wrote: post #76

Earlier quoted context omitted.

If $15m of taxpayer money is being paid out as a write-off for a finished movie, I feel like I as a taxpayer should have the right to see the movie. Nobody is forcing anyone to sell anything.

Taxpayers arent paying anything, Taxes are on profit after costs. The company spent 90M of its own money, and hasn't made any income? Why souldnt they be able the claim the 90m they spent as an expense?

I don't think it's about deducting expenses, otherwise this would be entirely moot because they'd deduct for expenses no matter whether it was a hit or a flop. I understood the article to be about deducting taxable income for a loss.

Re: Deleting and destroying finished movies

#159

Post by sokoloff »

AlbertCory wrote: post #122
sokoloff wrote: post #107

Earlier quoted context omitted.

If they irretrievably destroy it, its value becomes zero. That's the essence of being able to claim the tax loss (to "finally determine the value"). 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 incurr…

In the IRS's eyes, you destroyed an item that had value. Its value was whatever someone was willing to pay for it. Say $30M. If you destroyed it, that was your choice, but you didn't thereby incur a loss of $30M. Any more than if you had dynamited your HQ building.

If you decide to rebuild your HQ, you may well have to destroy the old one, even if someone would have bought it from you.

When a developer buys a property, razes it, and builds a new building there, all those costs and actions are permitted.

I find it amusing that a studio, who is almost surely getting professional tax advice with full knowledge of the facts and circumstances, is having the legality of the proposed course of action not just questioned but outright confidently asserted as contrary to the law based on an article that’s light on details.

Re: Deleting and destroying finished movies

#160

Post by lisper »

gruez wrote: post #125
lisper wrote: post #111

Earlier quoted context omitted.

Sure. Qualified business expenses are deductible. Personal expenses are not deductible, and neither are losses suffered because you willfully destroyed your own property. That is true for businesses as well as individuals.

Right, and the studio is deducting all the resources it spent making the movie. If you decide to invest in a bunch of money into developing a product, and then not commercialize it, all the r&d money that went into it is still deductible. It gets tricky when amortization and accruals are involved, but in the end it's approximately the same principle.

> It gets tricky when amortization and accruals are involved

That's right. But when all the dust settles, writing off an asset that had market value when you intentionally destroyed it will not pass an audit.

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