Television and Film Production
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Television and Film Case Study

Case Study

Audit Services

The Situation
A studio has determined that it will film in a certain state with a tax credit program. The studio looks to KPM to have an audit performed according to tax credit standards applicable in the state.

KPM Business Idea at Work
Based on its experience in the arena, KPM prepares an audit report of the costs incurred in the state, broken down by eligible and non-eligible costs. Further, KPM helps prepare the application and educates the client on the process for obtaining the credit under the state program.


Understanding State Incentive Programs

The Situation
A producer is considering shooting a motion picture in various states and wants to understand the tax benefit available in each. The producer looks to KPM to develop a pro forma credit by state based upon the production budget and film details.

KPM Business Idea at Work
KPM starts by getting the full details and logistics of the film and the nature of the anticipated costs and develops pro forma calculations of credits by state. After explaining the inclusion and exclusion details of the incentive program for each state, KPM recommends methods to receive the credit and estimates the timing for the client. Armed with this information, the producer develops plans on principal photography days and maximizes the return for state incentive programs.

 

 


Incentive Planning

The Situation
A production company is looking to take advantage of the generous tax incentives for shooting a film in Massachusetts, and requires a partner that knows the ins and outs of the program in order to maximize incentive return. The company looks to KPM for help.

KPM Business Idea at Work
KPM provides advice on how to structure payments of costs, recommends changes to how certain costs are presented on the application based upon the nuances of the program, and develops a comprehensive checklist of what is included with and excluded from the credit. Because KPM is brought in during pre-production, they are able to provide management with the tools needed to maximize the credit available to the film.

 

 

 

 

Tax Planning

The Situation
An individual investor is contemplating investing in a film and needs to understand the tax ramifications of the investment. The investor looks to KPM for tax planning advice.

KPM Business Idea at Work
KPM understands the nature of the investment and the state incentives available based upon the location of the shoot. KPM provides the tax incentives that will roll up to the investor, including the deductions under Section 181 and the credits from the state. Further, KPM prepares the individual’s full tax planning picture, taking into account his projected income and deductions from all other sources.

 

 

 

Matching Buyers and Sellers

The Situation
A producer of documentary films in a state with a transferable tax credit is looking for a buyer of the credit earned. The producer looks to KPM for assistance.

KPM Business Idea at Work
KPM introduces the producer to a buyer of the credit, through its network of contacts. The producer is able to monetize the credit during post-production, enabling additional dollars to fund post-production activities.

 

Performer Withholding Waiver

The Situation
A production is filming in a state which requires withholding on payroll in order to include it in the tax credit. The production accountant looks to KPM to assist in the filing of waivers with the state.

KPM Business Idea at Work
Because KPM understands the nature of the services that the employees will perform, they are able to assist in completion and processing of the waivers. KPM works with the state representative to ensure timely approval.

 

 

Royalty Audits

The Situation
A producer of documentaries has entered into various royalty contracts with distributors of content. The producer is concerned that the royalty payments received are not in accordance with the contract. The producer looks to KPM for assistance.

KPM Business Idea at Work
KPM understands the terms of the contract and prepares a forensic audit in order to determine if the royalty streams were indeed correct. Based upon the audit procedures, the client is able to recover additional royalty payments that were not previously available.

 

 



Agreed Upon Procedures and Contract Structuring

The Situation
An advertising agency is producing commercials and would like to understand how to structure the contracts with its client to ensure that credit will be available to the advertising agency. Further, the agency needs an agreed upon procedures report for purposes of filing a state incentive application.

KPM Business Idea at Work
KPM reviews the terms of the contract and works directly with an attorney to make revisions to ensure that the burden of the costs, and therefore the credit, remains with the advertising agency. Further, KPM prepares the agreed upon report, allowing the agency to timely earn and utilize the credit.

 

 


 

 


 

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