HR 2450 — FILM Act of 2017

(a) Election to treat costs as expenses (1) In general A taxpayer may elect to treat the cost of any qualified film or television production, any qualified live theatrical production, and any qualified sound recording production as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction. (2) Dollar limitation (A) In general Paragraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production or any qualified live theatrical production as exceeds $15,000,000. (B) Higher dollar limitation for productions in certain areas In the case of any qualified film or television production or any qualified live theatrical production the aggregate cost of which is significantly incurred in an area eligible for designation as— (i) a low-income community under section 45D, or (ii) a distressed county or isolated area of distress by the Delta Regional Authority established under section 2009aa–1 of title 7, United States Code, subparagraph (A) shall be applied by substituting “$20,000,000” for “$15,000,000”. (C) Qualified sound recording production Paragraph (1) shall not apply to so much of the aggregate cost of any qualified sound recording production, or to so much of the aggregate, cumulative cost of all such qualified sound recording productions in the taxable year, as exceeds $150,000. (b) No other deduction or amortization deduction allowable With respect to the basis of any qualified film or television production, any qualified live theatrical production, or any qualified sound recording production to which an election is made under subsection (a), no other depreciation or amortization deduction shall be allowable. (c) Election (1) In general An election under this section with respect to any qualified film or television production, any qualified live theatrical production, or any qualified sound recording production shall be made in such manner as prescribed by the Secretary and by the due date (including extensions) for filing the taxpayer’s return of tax under this chapter for the taxable year in which costs of the production are first incurred. (2) Revocation of election Any election made under this section may not be revoked without the consent of the Secretary. (d) Qualified film or television production For purposes of this section— (1) In general The term “qualified film or television production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation. (2) Production (A) In general A production is described in this paragraph if such production is property described in section 168(f)(3). (B) Special rules for television series In the case of a television series— (i) each episode of such series shall be treated as a separate production, and (ii) only the first 44 episodes of such series shall be taken into account. (C) Exception A production is not described in this paragraph if records are required under section 2257 of title 18, United States Code, to be maintained with respect to any performer in such production. (3) Qualified compensation For purposes of paragraph (1)— (A) In general The term “qualified compensation” means compensation for services performed in the United States by actors, production personnel, directors, and producers. (B) Participations and residuals excluded The term “compensation” does not include participations and residuals (as defined in section 167(g)(7)(B)). (e) Qualified live theatrical production For purposes of this section— (1) In general The term “qualified live theatrical production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation (as defined in subsection (d)(3)). (2) Production (A) In general A production is described in this paragraph if such production is a live staged production of a play (with or without music) which is derived from a wri...