They’ve just cancelled their upcoming film “Coyote vs. Acme,” and everyone is calling it a tax write-off, just like they did with the cancelled Batgirl film.
Having spent so much on the production of these films, how is it beneficial to them to cancel the film outright? What is a tax write-off in that sense?
In: Economics
When your options are:
* Continue to pour money into the production of a film we’re pretty sure will flop and be a net loss.
* Cancel production and take a deduction on our tax filing based on the amount we’ve wasted on production already.
Choosing the latter isn’t a bad idea, especially if the reduction in your tax burden is greater than the net loss you expect to take if you go ahead and finish production.
It’s because they’re in a bad position and cancelling production is the lesser of two evils. They’re not *making* any money, this just allows them to lose less in the long run.
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