West Palm Beach (HedgeCo.Net)- Noci Pictures Entertainment, A Chicago film finance and production company is offering an innovative way for high net worth investors, hedge funds and private equity groups to receive 100% deductions for film investments as well as state income tax credits.
Yuri Rutman’s Noci Pictures Entertainment is shooting a slate of films in Illinois using a hybrid of tax, finance, risk minimization and exit strategies that offer dollar for dollar Federal Tax Deductions and state income tax credits.
"I don’t know of any other alternative investment that can offer tax incentives, multiple exit strategies, as well as giving back to the local economy, while being
involved with the moviemaking process, Rutman states, "that would add to the long
line of recent films either shot in Illinois or about to shoot including “The Dark Knight”, the upcoming John Dillinger film with Johnny Depp and Christian Bale, as well as a lot of other Hollywood films."
The American Jobs Creation Act Of 2004, the 2004 enactment of Section 181 of the
Internal Revenue Code of 1986 (the "Code") marked an unprecedented change in U.S. policy toward the phenomenon known as "Runaway Production".
Runaway Production refers to a film or television production that leaves one state or country to be filmed in another purely for economic reasons. This movement occurs
because producers tend to film in the location where they can minimize production costs through tax incentives, cheaper labor.
An individual or company who makes an investment into Section 181 qualified productions can take a 100% deduction of their investment against their passive
income in the year their investment was made.
But since Section 181 also allows for all other recourse debt costs which are usually associated with film finance, a $10 million dollar film, where only $3.5 million is equity, an investor can deduct $3.5 million dollars against the $10 million, especially if the latter is mezzanine or gap finance. Plus, an additional 20% in Illinois tax credits can be generated.
Regarding Section 181 as an alternative investment for hedge funds that want to offset their tax liabilities, Rutman adds "That I am redefining film finance that is more serving to the community, local economies, and people who need jobs. Plus, I have so many risk minimization strategies in place and several exit scenarios, there are a lot of hedge and private equity funds who are now starting to feel a bit shafted with their film fund deals simple because they did not do their homework."
Alex Akesson
Editor for HedgeCo.Net
Email: alex@hedgeco.net
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