Summary

Adds U.S.-produced sound recordings to the set of creative productions that can elect an immediate tax deduction for production costs. The deduction for each sound recording is capped at $150,000 per production and $150,000 total per taxable year, and qualifying recordings are also treated as eligible for bonus depreciation with the initial release date treated as the placed-in-service date. The change defines a "qualified sound recording production" as a sound recording made and recorded in the United States, extends the existing limits on other deductions and amortization to these recordings, and applies to productions that begin in taxable years ending after the law is enacted.

Key Points

• Adds "qualified sound recording production" to the kinds of productions that can elect an immediate deduction of production costs under IRC §181.
• Caps the election at $150,000 per sound recording production and $150,000 total per taxable year for sound recordings.
• Defines eligible recordings as those produced and recorded in the United States, using the copyright law definition of sound recording.
• Extends the existing prohibition on other deductions or amortization to sound recordings that use the IRC §181 election.
• Makes qualifying sound recordings eligible for bonus depreciation and sets initial release/broadcast as the placed-in-service date.
• Applies only to productions beginning in taxable years ending after the law is enacted.
• Requires taxpayers to follow the same tax treatment and limits for sound recordings that already apply to film/TV and theatrical productions.
• Amendments are limited, technical, and focused on tax treatment—no direct spending or program creation.

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