California | Tax Law
Legal Question
Do advanced payments made to a corporation for a film have to be picked up as in
We have an individual who has an S corporation for which he is the only shareholder. He has been developing a movie which he hopes to eventually direct. A big motion picture company wishes to fund half of the film and is offering $500,000 as an advance payment. This money will be used to pay for expenses incurred in developing the film. Any remaining funds can be kept by the individual. My question is, how do we avoid having the $500,000 picked up as income in the year it is given to us? The film is likely to cost more than the $1,000,000 and we expect all of the advance payment to be used up over the next couple of years. I have heard about rev proc 2004-34 which seems to insinuate there is a way around this, but I am uncertain. If anyone can help me out that would be great! Thanks in advance!
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Read More Answered By: Yaphett K. Powell |
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