Andeco Films Note to Film Investors

IRS Tax Code 168(K) 100% Bonus Depreciation for Film Investors

Tax Code 168(K), allows film investors to immediately deduct 100% of the cost of qualified film, television and theatrical productions in the year they are placed in service. The bonus depreciation service as a powerful tax shelter enabling investors to offset their taxable income by writing off production cost upfront rather than over several years. 

NOTE: Even though Andeco Films has over 30 years experience in the movie industry making motion picture and television productions, we are only providing information we feel that would be valuable to possible investors. We are in NO WAY giving investment advice to accredited investors that maybe interested in investing in film. We strongly suggest that you seek confirmation and advice from an experienced Entertainment Attorney, Entertainment Accountant, Tax Attorney.

 Qualified Film Production Requirements Section 168(k)

• Production Types: Feature films, television series, and live theatrical productions are eligible, essentially inheriting the requirements previously found in Section 181.
• Sound Recordings: Included in the eligible category, defined as albums, soundtracks, and podcasts.
• 75% Compensation Test: For film/TV, at least 75% of the total compensation must be for services performed in the United States.
• Timing: Production must be acquired and placed in service after January 19, 2025.
• Original Use: The original use of the production must commence with the taxpayer.
• New "One Big Beautiful Bill Act" (OBBBA) Rules: Reinstated 100% bonus depreciation for 2025 and beyond, replacing the phased-down percentages (40% or 60%) that were previously scheduled for 2025. CCH® AnswerConnect +5

Key Considerations

• Placement in Service: A film is generally considered placed in service upon its initial release, broadcast, or staging.
• Investment Type: The taxpayer must be an owner of the production, not just an investor, and hold the content for production of income.