Friday, April 20, 2012
Following up on my prior post, Tax Court to Decide: Are Documentaries Hobbies for Tax Purposes?: Forbes, Maker of 'Up With People' Movie Knocks Down IRS, by Janet Novack:
In a big win for documentary filmmakers, a U.S. Tax Court Judge Thursday ruled that Lee Storey, the producer and director Smile `Til It Hurts: The Up with People Story, can write off hundreds of thousands of losses from her filmmaking against her substantial income as a Phoenix lawyer, even though she failed to make a profit for six straight years. ... In her 46-page decision, [Judge] Kroupa not only accepted documentary filmmaking as a legitimate business, but also recognized it is one where the unprofitable start-up phase may be longer than normal and allowed Storey ever penny of her claimed losses. [Storey v. Commissioner, T.C. Memo. 2012-115.]
See also Double Taxation.