Financing question

S

Sajc05

Active member
I'm sure this has been discussed before so I apologize pre emptively. But if some one can point me in the right direction I'd appreciate it.

But 2 questions about funding a short film.

1>If I have a few grand that I want to spend on a short is it better to set up an LLC instead of just writing personal checks? Does it even matter?

2>And since shorts are pretty much not for profit is Attracting tax deductible donations possible? If it's for the arts? Or is that a stretch and way off.

Thanks
 
Setting up an LLC is best once you hit three zeros on the budget. Make sure you have a separate bank account for it as well or you might lose liability protection.

Not for profit and not making a profit are completely different things. So that one is nowhere near close.
 
I'm no expert, but here's my understanding.

1. The only reason to create an LLC would be either to try and minimize your liability should something happen on the shoot, or if you were planning to use SAG or another union's people and didn't want any existing business entity to be signatory from that point on. Are you purchasing insurance, permits, and doing things by the book, or guerrilla style? I'm not sure how much personal protection an LLC would afford you if you didn't have insurance and something bad happened in the making of your production.

2. I think you need to be a 501.c non-profit for donations to be tax deductible, or you need fiscal sponsor who is a 501.c.

Then again, I could be completely wrong :)
 
Thanks a lot guys, very helpful

I will be seeking a permit for at least one location. Haven't considered any insurance plans. Is there any tax implications? Spending personal money on a film through your LLC could be some kind of expense that could be written off when there is no profit made?
 
An LLC is a separate business entity, which can be taxed like a corporation or like a partnership. If you choose to have your LLC taxed as a pass-thru, then all losses in the LLC will flow to you as business losses, and can be deductible on your tax return (assuming your accountant approves, of course).

For attracting tax-deductible donations, look into fiscal sponsorship -- you'd have to become approved by the fiscal sponsor (Mark Harris is using www.fracturedatlas.org); if you are approved, your contributors would find that their contributions are indeed tax-deductible. The fiscal sponsor will absorb a little bit of your donations (usually maybe 5% or 10%) and pass the rest on to you in the form of a grant.
 
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