Never said it was a write off. The video I watched on it did say that someone who worked on the film said it was for tax reasons. It’s a single source that might be incorrect, though.
Edit: Here’s the video I watched on it. Says right on the title that it was for tax purposes and I don’t think an attorney would get that part incorrect.
There’s no legitimate reason to intentionally take losses (or refuse to take revenue) for tax reasons, though.
If you lose $1000 and get a tax benefit worth $200 on those losses, it’s still a net loss of $800, so you should rather get at least some money back. Getting $500 back might mean that you lose $500 and then get $100 back in tax benefits, so that your net loss is $400 instead. That’s an improvement over losing $800, so it’s worth doing.
More likely, the contracts around the movie had them needing to pay rightsholders, actors/writers/directors, and producers based on certain formulas on the gross revenue, or would be contractually obligated to spend a minimum on marketing and promotion if there was going to be a release, etc.
Taxes just alleviate the degree of losses (or reduce the amount of profit), which can change behavior around risk taking, but it wouldn’t make sense to abandon a finished movie solely for tax reasons.
Never said it was a write off. The video I watched on it did say that someone who worked on the film said it was for tax reasons. It’s a single source that might be incorrect, though.
Edit: Here’s the video I watched on it. Says right on the title that it was for tax purposes and I don’t think an attorney would get that part incorrect.
There’s no legitimate reason to intentionally take losses (or refuse to take revenue) for tax reasons, though.
If you lose $1000 and get a tax benefit worth $200 on those losses, it’s still a net loss of $800, so you should rather get at least some money back. Getting $500 back might mean that you lose $500 and then get $100 back in tax benefits, so that your net loss is $400 instead. That’s an improvement over losing $800, so it’s worth doing.
More likely, the contracts around the movie had them needing to pay rightsholders, actors/writers/directors, and producers based on certain formulas on the gross revenue, or would be contractually obligated to spend a minimum on marketing and promotion if there was going to be a release, etc.
Taxes just alleviate the degree of losses (or reduce the amount of profit), which can change behavior around risk taking, but it wouldn’t make sense to abandon a finished movie solely for tax reasons.