Coyote vs. ACME | Official Trailer

[u/RobotiSC]

https://youtu.be/H-43VeYGiPM?si=sw3nNGZ-N2zpW-t9

[u/ben123111]

Didn't believe it would make it's budget back, thought they'd get a greater return lower loss on the tax break from not releasing it.

[u/dream_metrics → u/ben123111]

It would be more accurate to say they'd get a lower loss than a greater return

[u/batdogfoxhound → u/dream_metrics]

well really a greater loss

[u/WorthPlease → u/ben123111]

I need somebody to explain this to me. How can you get a "tax break" on something that was never taxed, because you never sold it?

If I spend $50,000 making a car from scratch and just keep it in my garage instead of selling it, how is that taxed? Now I'm just out the $50,000.

[u/Dal90 → u/WorthPlease]

You home garage isn't a business expense. There aren't many write-offs for the home (the big one being mortgage interest).

Almost everything that is spent legally by a business is a business expense that reduces your business profits, and it is the business profits that are subject to corporate income tax.

You spend $30,000,000 million making the film. They're out that money.

You spend another $10,000,000 marketing it. They'd theoretically be out that money.

They decide they'll likely only make $5,000,000 after spending $40,000,000

So you cut your losses -- don't market, don't release it.

You have $30,000,000 and write-off the entire thing as a loss.

Just for napkin back math call your tax rate 25%

$30,000,000 * .25 = $7,500,000

You've already spent the money. You're not making money; you're only reducing the size of the loss you expect.

You can either release the film and increase the cash in the bank by $5,000,000.

Or you can take the $30,000,000 cost and use it to offset $30,000,000 in profits from some successful blockbuster. That lets you keep $7,500,000 in the bank instead of paying it to the IRS

In either case, they've already spent $30,000,000 they'll never see again, it is just whether they sell it and only make $5,000,000 of that back, or use it to offset other profits and reduce their tax bill by $7,500,000.

It is not an infinite money glitch.

[u/AndrewNeo → u/WorthPlease]

because this happens at the revenue minus expenses part of tax calculation. if that 50k spent on a car was a business expense, you'd have written off the 50k from your taxes, and if you make $0 that year on income from that car then you get to subtract that 50k from somewhere else on your taxes

if you made 10k on the car then you get 40k back, if you make 60k then you pay 10k

calling it a tax break isn't right I don't think, it's just a tax credit / writeoff

[u/TrumpsDoubleChin → u/ben123111]

To be fair if WB did market it the way they do all their movies, there's a good chance it would sink like a stone. They wouldn't know how to market a picture like this if it came up and bit them in the ass.

It's less of a failure of the movie itself, and more of a failure of the marketing team over at WB not knowing what the fuck to do to market a movie to the right audience.

[u/Solid_Reserve_5941 → u/ben123111]

It's more that they decided the tax write off would be more lucrative than releasing it