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Discussion Forum Index --> Advanced Tax Questions --> Production of role playing game book
Discussion Forum Index --> Tax Questions --> Production of role playing game book
Davisst3 (talk|edits) said:
| 22 January 2008
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| Client is an LLC that is producing a role playing game book with extensive artwork and original creative work (sci-fi). I'm struggling with two issues. First, is this project subject to 263A or not since this is a creative work? If so, then I am assuming the costs of the editing, artists, and payroll of the two main creative guys will be recorded to inventory. Also, what indirect costs need to be allocated to inventory and how? Based on other posts and of course the guidance, I could see either expensing as incurred since the gross receipts from preorders are immaterial at this point or capitalizing as a start-up cost. Second, how do I treat start-up costs? When does the operation of publishing the first in a series of books begin (when creative work starts, when preorders were taken, or wait until the books are published)? They have been working on it under the business name since January 2007 and have had an elaborate website advertising for it since mid-year 2007, but the books were not published until this past week. Any tips, guidance, or experience in this area would be appreciated.
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Death&Taxes (talk|edits) said:
| 27 January 2008
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| Normally I would say the creative effort is not subject to 263A, but here you use the word 'producing' or what sounds like assembling the book. I wish I could be more help.
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Davisst3 (talk|edits) said:
| 27 January 2008
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| They are doing everything from creating the literature and art to overseeing the printing of the book by a printer they selected to handling the advertising of the book. This situation seems a little gray, so your thoughts would be appreciated on the 263A and when the 'start-up' period ends. Since they are doing all facets of the project, it is hard for me to say when the business actually started operations since they have been preselling the book for awhile.
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San Diego (talk|edits) said:
| 27 January 2008
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| I would agree with D&T for the initial creation. 263A should come into play for the actual production. Just my thoughts and I'm not 100% sure....
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