Didn't see a thread on this (unless I missed it).
This could potentially change the landscape (in a good way) for many indie filmmakers.
Results 1 to 6 of 6
04-05-2012 05:45 PM
04-06-2012 10:46 AM
- Join Date
- Aug 2011
I have been following it for a while and Obama signed it yesterday. With crowdfunding you deal with income and taxes because sometimes it is a prepayment for a dvd, etc. So it is an exchange of goods. People may consider it a donation, but not really. It really is income. People have screwed around trying to hookup with non-profits to give the people a write-off with mixed results.
With the bits that I have read about the JOBS bill, you now have investors. So maybe you will get more people interested because they now own part of the deal. But now you have a ton more documentation involved to explain what the investors are getting, business plan, the waterfall tables, operating agreements, etc. Depending on how the deal is structured, you may end up with K1s to provide to every investor, every year. And when I last checked Sec 181 was not renewed so you no longer have that benefit to offer investors.
Look, I think both are great approaches because they provide the artist with access to funds. Especially, if you have nothing to lose. For some people, the complications may not be worth the effort and you don't want the IRS up your butt about this stuff. It is a bit of the wild wild west and I am not sure if the IRS has figured out the handling of crowdsourcing for tax purposes.
Like I said, for those who have nothing to lose or willing to go through the process both options are great. I think the JOBS approach will give someone an experience closer to have bigger money is raised. Because of the documentation that will be needed. And everyone has to start somewhere to gain experience.
I think it will be interesting to watch.
04-06-2012 11:10 AM
I plan on listing my crowdfunding as income (Amazon is going to file it with the IRS when I am paid, that's how kickstarter works), but it's all going back out the door as expenses, so should be a wash (I hope).
With "investing" it's going to get MUCH more complicated I imagine, but potentially worth it in some situations.
04-06-2012 01:15 PM
- Join Date
- Nov 2007
- EHT, NJ, USSA
And by the way, the details on that link are wrong. The senate modified the bill to cap the maximum amount that can be raised to $1 million per year.
Below $100,000 you can get by without audited financials.
Between $100,000 and $500,000 your financials need to be verified (but not audited) by a third party CPA.
Over $500,000 they have to be audited.
Crowd Funding investors aren't counted towards the new 2,000 investor limit.
If your annual income is less than $100,000 you're limited to investing the greater of $2000, or 5% of your annual income.
Over $100,000 you're limited to 10% (but the maximum aggregated amount is $100,000).
Last edited by Andrew McCarrick; 04-06-2012 at 01:27 PM.
04-08-2012 05:01 AM
- Join Date
- Feb 2012
Yeah. This business is ALL about raising money. Writing and filmmaking is EASY.
04-08-2012 07:32 AM
- Join Date
- Sep 2006
I'm looking forward to seeing how this will work for me.Brad Ferrell - Producer/Director
www.ferrellfilmsllc.com - Development, Production, and Post
H-Town Brawlers in Development.
Machine Gun Man in Development.
Skipper in Post.
Man in the Closet in Post.
No Chance in Hell in Pre-Production.