§ 181 Treatment of certain qualified productions

OLRC 119-134 · eCFR 2026-10-19 · 7 regs · 10 amending Acts · cited by 1 sections

Enacted 2004 · Pub. L. 108-357 Amended · 10 Acts

20042005200820102013201420152018201920202025(a) Election to treat costs as expenses(b) No other deduction or amortization deduction allowable(c) Election(d) Qualified film or television production(e) Qualified live theatrical production(f) Qualified sound recording production(g) Application of certain other rules(h) Termination
Prior provisions 1
  • A prior section 181, Pub. L. 87–834, § 2(c), Oct. 16, 1962, 76 Stat. 970, related to a deduction for unused investment credit, prior to repeal by Pub. L. 88–272, title II, § 203(a)(3)(B), (4), Feb. 26, 1964, 78 Stat. 34, applicable in case of property placed in service after Dec. 31, 1963, with respect to taxable years ending after such date, and in case of property placed in service before Jan. 1, 1964, with respect to taxable years beginning after Dec. 31, 1963.
Connections Cited by 1 · Cites 4
§ 181 Treatment of certain qualified productions
§ 1.181-0 Table of contents.§ 1.181-1 Deduction for qualified film and television production costs.§ 1.181-2 Election to deduct production costs.§ 1.181-3 Qualified film or television production.§ 1.181-4 Special rules.§ 1.181-5 Examples.§ 1.181-6 Effective/applicability date.Prop. § 1.181-0 Proposed 2011 · Table of contents.
Amended 2015, 2025
  • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(h)(1), amended section catchline generally. Prior to amendment, section catchline read as follows: “Treatment of certain qualified film and television and live theatrical productions”.
  • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(C), inserted “and live theatrical” after “film and television” in section catchline.

Cases: Storey v. Commissioner, T.C. Memo. 2012-115; Staples v. Commissioner, T.C. Memo. 2013-262; Kantchev v. Commissioner, T.C. Memo. 2015-234

Forms: Form 3115; Form W-2

Final rules 3

    (a) Election to treat costs as expenses

    Cited by 1

      (1) In general A taxpayer may elect to treat the cost of any qualified film or television production, any qualified live theatrical production, and any qualified sound recording production as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction.

      Amended 2015, 2025
      • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(a), substituted “qualified film or television production, any qualified live theatrical production, and any qualified sound recording production” for “qualified film or television production, and any qualified live theatrical production,”.
      • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(1), inserted “, and any qualified live theatrical production,” after “any qualified film or television production”.
      Cited by 2

        (2) Dollar limitation

        Cited by 3

          (A) In general Paragraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production or any qualified live theatrical production as exceeds $15,000,000.

          Amended 2008, 2015
          • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(A), inserted “or any qualified live theatrical production” after “qualified film or television production”.
          • 2008 Pub. L. 110-343 Pub. L. 110–343, § 502(b), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “Paragraph (1) shall not apply to any qualified film or television production the aggregate cost of which exceeds $15,000,000.”
          Cited by 1

            (B) Higher dollar limitation for productions in certain areas In the case of any qualified film or television production or any qualified live theatrical production the aggregate cost of which is significantly incurred in an area eligible for designation as—

            “In the case of any qualified film or television production or any qualified live theatrical production the aggregate cost of which is significantly incurred in an area eligible for designation as—” Opening words
            Textual readingANY OF= higher dollar limitation applies

            (i) a low-income community under section 45D, or

            (ii) a distressed county or isolated area of distress by the Delta Regional Authority established under section 2009aa–1 of title 7, United States Code,

            subparagraph (A) shall be applied by substituting “$20,000,000” for “$15,000,000”.

            Amended 2015
            • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(A), inserted “or any qualified live theatrical production” after “qualified film or television production”.

            (C) Qualified sound recording production Paragraph (1) shall not apply to so much of the aggregate cost of any qualified sound recording production, or to so much of the aggregate, cumulative cost of all such qualified sound recording productions in the taxable year, as exceeds $150,000.

            Amended 2025

            (b) No other deduction or amortization deduction allowable With respect to the basis of any qualified film or television production, any qualified live theatrical production, or any qualified sound recording production to which an election is made under subsection (a), no other depreciation or amortization deduction shall be allowable.

            Amended 2015, 2025
            • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(c), substituted “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production” for “qualified film or television production or any qualified live theatrical production”.
            • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(A), inserted “or any qualified live theatrical production” after “qualified film or television production”.

            (c) Election

            (1) In general An election under this section with respect to any qualified film or television production, any qualified live theatrical production, or any qualified sound recording production shall be made in such manner as prescribed by the Secretary and by the due date (including extensions) for filing the taxpayer’s return of tax under this chapter for the taxable year in which costs of the production are first incurred.

            Amended 2015, 2025
            • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(d), substituted “qualified film or television production, any qualified live theatrical production, or any qualified sound recording production” for “qualified film or television production or any qualified live theatrical production”.
            • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(A), inserted “or any qualified live theatrical production” after “qualified film or television production”.

            (2) Revocation of election Any election made under this section may not be revoked without the consent of the Secretary.

            (d) Qualified film or television production For purposes of this section—

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              (1) In general The term “qualified film or television production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation.

              Textual readingALL OF= a qualified film or television productionGate Wizard 🧙
              “any production described in paragraph (2)”
              “75 percent of the total compensation of the production is qualified compensation” needs § 181(d)(3)(A)
              Cited by 1

                (2) Production

                Amended 2005
                • 2005 Pub. L. 109-135 Pub. L. 109–135 struck out “For purposes of a television series, only the first 44 episodes of such series may be taken into account.” at end of subpar. (A), added subpar. (B), and redesignated former subpar. (B) as (C).
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                  (A) In general A production is described in this paragraph if such production is property described in section 168(f)(3).

                  (B) Special rules for television series In the case of a television series—

                  (i) each episode of such series shall be treated as a separate production, and

                  (ii) only the first 44 episodes of such series shall be taken into account.

                  (C) Exception A production is not described in this paragraph if records are required under section 2257 of title 18, United States Code, to be maintained with respect to any performer in such production.

                  (3) Qualified compensation For purposes of paragraph (1)—

                  Cited by 1

                    (A) In general The term “qualified compensation” means compensation for services performed in the United States by actors, production personnel, directors, and producers.

                    Textual readingALL OF= qualified compensation
                    “compensation for services performed in the United States by actors, production personnel, directors, and producers.”
                    Amended 2008
                    • 2008 Pub. L. 110-343 Pub. L. 110–343, § 502(d), substituted “actors, production personnel, directors, and producers.” for “actors, directors, producers, and other relevant production personnel.”

                    (B) Participations and residuals excluded The term “compensation” does not include participations and residuals (as defined in section 167(g)(7)(B)).

                    (e) Qualified live theatrical production For purposes of this section—

                    Amended 2015
                    • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(c)(2), added subsec. (e). Former subsec. (e) redesignated (f).
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                      (1) In general The term “qualified live theatrical production” means any production described in paragraph (2) if 75 percent of the total compensation of the production is qualified compensation (as defined in subsection (d)(3)).

                      (2) Production

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                        (A) In general A production is described in this paragraph if such production is a live staged production of a play (with or without music) which is derived from a written book or script and is produced or presented by a taxable entity in any venue which has an audience capacity of not more than 3,000 or a series of venues the majority of which have an audience capacity of not more than 3,000.

                        Cited by 1

                          (B) Touring companies, etc. In the case of multiple live staged productions—

                          “In the case of multiple live staged productions—” Opening words
                          Textual readingALL OF= each treated as separate production

                          (i) for which the election under this section would be allowable to the same taxpayer, and

                          (ii) which are—

                          “In the case of multiple live staged productions—” Enclosing § 181(e)(2)(B)
                          Textual readingANY OF= productions described in clause (ii)

                          (I) separate phases of a production, or

                          (II) separate simultaneous stagings of the same production in different geographical locations (not including multiple performance locations of any one touring production),

                          each such live staged production shall be treated as a separate production.

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                            (C) Phase For purposes of subparagraph (B), the term “phase” with respect to any qualified live theatrical production refers to each of the following, but only if each of the following is treated by the taxpayer as a separate activity for all purposes of this title:

                            (i) The initial staging of a live theatrical production.

                            (ii) Subsequent additional stagings or touring of such production which are produced by the same producer as the initial staging.

                            (D) Seasonal productions

                            (i) In general In the case of a live staged production not described in subparagraph (B) which is produced or presented by a taxable entity for not more than 10 weeks of the taxable year, subparagraph (A) shall be applied by substituting “6,500” for “3,000”.

                            Cited by 1

                              (ii) Short taxable years For purposes of clause (i), in the case of any taxable year of less than 12 months, the number of weeks for which a production is produced or presented shall be annualized by multiplying the number of weeks the production is produced or presented during such taxable year by 12 and dividing the result by the number of months in such taxable year.

                              (E) Exception A production is not described in this paragraph if such production includes or consists of any performance of conduct described in section 2257(h)(1) of title 18, United States Code.

                              (f) Qualified sound recording production For purposes of this section, the term “qualified sound recording production” means a sound recording (as defined in section 101 of title 17, United States Code) produced and recorded in the United States.

                              Textual readingALL OF= a qualified sound recording production
                              “a sound recording (as defined in section 101 of title 17, United States Code)”
                              “produced and recorded in the United States”
                              Amended 2008, 2010, 2013, 2014, 2015, 2025
                              • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(e), added subsec. (f) and redesignated former subsec. (f) as (g). Former subsec. (g) redesignated (h).
                              • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(c)(1), redesignated subsec. (e) as (f). Former subsec. (f) redesignated (g).
                              • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(b)(2)(B), which directed insertion of “or qualified live theatrical productions” after “qualified film or television productions”, was executed by making the insertion after “qualified film and television productions”, to reflect the probable intent of Congress.
                              • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(a), substituted “December 31, 2016” for “December 31, 2014”.
                              • 2014 Pub. L. 113-295 Pub. L. 113–295 substituted “December 31, 2014” for “December 31, 2013”.
                              • 2013 Pub. L. 112-240 Pub. L. 112–240 substituted “December 31, 2013” for “December 31, 2011”.
                              • 2010 Pub. L. 111-312 Pub. L. 111–312 substituted “December 31, 2011” for “December 31, 2009”.
                              • 2008 Pub. L. 110-343 Pub. L. 110–343, § 502(a), substituted “December 31, 2009” for “December 31, 2008”.
                              Cited by 1

                                (g) Application of certain other rules For purposes of this section, rules similar to the rules of subsections (b)(2) and (c)(4) of section 194 shall apply.

                                Amended 2015, 2018, 2019, 2020, 2025
                                • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(e), added subsec. (f) and redesignated former subsec. (f) as (g). Former subsec. (g) redesignated (h).
                                • 2020 Pub. L. 116-260 Pub. L. 116–260 substituted “December 31, 2025” for “December 31, 2020”.
                                • 2019 Pub. L. 116-94 Pub. L. 116–94 substituted “December 31, 2020” for “December 31, 2017”.
                                • 2018 Pub. L. 115-123 Pub. L. 115–123 substituted “December 31, 2017” for “December 31, 2016”.
                                • 2015 Pub. L. 114-113 Pub. L. 114–113, § 169(c)(1), redesignated subsec. (f) as (g).

                                (h) Termination This section shall not apply to qualified film and television productions, qualified live theatrical productions, or qualified sound recording productions commencing after December 31, 2025.

                                Amended 2025
                                • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(f), substituted “qualified film and television productions, qualified live theatrical productions, or qualified sound recording productions” for “qualified film and television productions or qualified live theatrical productions”.
                                • 2025 Pub. L. 119-21 Pub. L. 119–21, § 70434(e), redesignated subsec. (g) as (h).