Changes

<b>Never Split Tens</b> is a major motion picture based on the life of the mathematician who developed the card counting technique for the casino game of blackjack.  It production budget will be raised by loans taking advantage of Illinois income tax credits and federal income tax deductions.

<b>Never Split Tens</b> is a major motion picture based on the life of the mathematician who developed the card counting technique for the casino game of blackjack.  Its production budget will be raised by loans taking advantage of Illinois income tax credits and federal income tax deductions.

==The Motion Picture==

==The Motion Picture==

Logline:  When an eccentric M.I.T. math professor develops a computer system for winning blackjack and tests it with mob-backed money in casinos, he loses his wife and job but redeems himself when his huge winnings cause a revolution in the casino industry.  Based on a true story.

Logline:  When an eccentric M.I.T. math professor develops a computer system for winning blackjack and tests it with mob-backed money in casinos, he loses his wife and job but redeems himself when his huge winnings cause a revolution in the casino industry.  Based on a true story.

Motion pictures can be characterized as plot driven ("Body Heat" and "The Sting"), by their setting ("Star Wars" and "Harry Potter"), or character driven ("A Beautiful Mind" and "Catch Me If You Can").  This motion picture is character driven.  As a result, we will be casting a A-list actors in the roles of the protagonist,  his wife, and the gangster.  This will attract distributors in all modes, box office, electronic, and ancillary (please see section 5 below).  

Motion pictures can be characterized as plot driven ("Body Heat" and "The Sting"), by their setting ("Star Wars" and "Harry Potter"), or character driven ("A Beautiful Mind" and "Catch Me If You Can").  This motion picture is character driven.  As a result, Never Split Tens will be casting a A-list actors in the roles of the protagonist,  his wife, and the gangster.  This will attract distributors in all modes, box office, electronic, and ancillary (please see section 5 below).  

==Production Funding by Income Tax Credits and Deductions ==

==Production Funding by Income Tax Credits and Deductions ==

==Usual Funding Modes==

==Usual Funding Modes==

In the usual case, the film company obtains the tax credit after completion of filming.  Our concept is to reverse the scenario:  We will be obtaining a tax credit and we are looking for an entity or individuals to provide a loan based on that tax credit as collateral before production begins.  Hopefully you can suggest this concept to your select clients seeking substantial no-risk tax savings.

In the usual case, the film company obtains the tax credit after completion of filming.  Our concept is to reverse the scenario:  The producers of Never Split Tens will be obtaining a tax credit and are seeking an entity or individuals to provide a loan based on that tax credit as collateral before production begins.  Accountants are encouraged to suggest this concept to their select clients seeking substantial no-risk tax savings.

==Funding for Never Split Tens==

==Funding for Never Split Tens==

===Proposal===

===Proposal===

We request a $2.9 million loan for up to eight months from those with large state and federal tax liabilities to whom you provide professional accounting and investment advice.  The collateral items are related to:

The producers request a $2.9 million loan for up to eight months from those with large state and federal tax liabilities to whom you provide professional accounting and investment advice.  The collateral items are related to:

a) Illinois tax credits based on 35 ILCS 16/, and </br>

a) Illinois tax credits based on 35 ILCS 16/, and </br>

The loan will provide a significant portion of the production costs of the filming of a major motion picture in Illinois in the popular casino gambling genre.  The eight month period results from a projected five month filming period and a two to three month period for receipt of the Illinois tax credit from the Illinois Film Office after filming has been completed.

The loan will provide a significant portion of the production costs of the filming of a major motion picture in Illinois in the popular casino gambling genre.  The eight month period results from a projected five month filming period and a two to three month period for receipt of the Illinois tax credit from the Illinois Film Office after filming has been completed.

Please note that the request of $2.9 million, while based on a preliminary production budget estimate, is for illustrative purposes.  The actual amount requested will result from an audit by the Illinois Film Office of the production budget.  This will determine the actual amount to be spent in Illinois.

Please note that the request of $2.9 million, while based on a preliminary production budget estimate, is for illustrative purposes.  The actual amount requested will result from an audit by the Illinois Film Office of the production budget.  This will determine the actual amount to be spent in Illinois.

We calculate below an annualized 35% return using a federal tax bracket of 20% and an annualized return of 58% using a federal tax bracket of 35%.  These surprisingly large returns result entirely from state and federal government investment incentive programs.

The producers calculate below an annualized 35% return using a federal tax bracket of 20% and an annualized return of 58% using a federal tax bracket of 35%.  These surprisingly large returns result entirely from state and federal government investment incentive programs.

Unlike many other vehicles, the tax benefits of film production are independent of whether or not the film makes a profit.  They result solely on expenditures during production being made in the state of Illinois and the United States.

Unlike many other vehicles, the tax benefits of film production are independent of whether or not the film makes a profit.  They result solely on expenditures during production being made in the state of Illinois and the United States.

An additional credit is provided equal to 15% of the salaries of at least $1000 of residents living in economically disadvantaged areas.  For the purposes of this proposal, we will not include this additional tax credit in our calculations.   

An additional credit is provided equal to 15% of the salaries of at least $1000 of residents living in economically disadvantaged areas.  For the purposes of this proposal, we will not include this additional tax credit in our calculations.   

Although your reading of the below may indicate that the returns are "too good to be true," the returns result from government investment stimulation policy.  As 35 ILCS 16/ states:

Although a reading of the below may indicate that the returns are "too good to be true," the returns result from government investment stimulation policy.  As 35 ILCS 16/ states:

Film Production Services Tax Credit Act of 2008.   

Film Production Services Tax Credit Act of 2008.   

Section 5. Purpose. The General Assembly finds that the Illinois economy is highly vulnerable to other states and nations that have major financial incentive programs targeted to the motion picture industry.   

Section 5. Purpose. The General Assembly finds that <i> the Illinois economy is highly vulnerable to other states and nations</i> that have major financial incentive programs targeted to the motion picture industry.   

The Act can be accessed at --</br> http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2972&ChapterID=8

The Act can be accessed at --</br> http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2972&ChapterID=8

In this frequently employed financing scenario, the film company faces two problems,  

In this frequently employed financing scenario, the film company faces two problems,  

1.  the source of the initial production funds, and  

 

1.  the source of the initial production funds, and </br>

2. the large middle-man broker fees.

2. the large middle-man broker fees.

We are reversing the scenario.  We will be obtaining a tax credit and we are looking for an entity or individuals to provide a loan based on that tax credit as collateral before production begins.

The producers of Never Split Tens are reversing the scenario.  They will be obtaining a tax credit and are looking for an entity or individuals to provide a loan based on that tax credit as collateral before production begins.

We therefore wish to approach those with large Illinois tax liabilities.  Either corporations doing business in Illinois or attorneys in large firms are appropriate fits.  Some of these have large incomes, large tax liabilities, and are associated with a significantly large number of partners.  The appropriate manner by which to approach these groups is through their advising accountants.

The producers therefore wish to approach those with large Illinois tax liabilities.  Either corporations doing business in Illinois or attorneys in large firms are appropriate fits.  Some of these have large incomes, large tax liabilities, and are associated with a significantly large number of partners.  The appropriate manner by which to approach these groups is through their advising accountants.

====Example====

====Example====

We budget spending $10 million in Illinois.  The loaning entity or individuals provide a loan of $2.9 million.  After six to eight months, Illinois provides our production company the $3 million tax credit which is then transferred to the loaning entity or individuals.  With that $100,000 paid back in interest, the earnings on the loan is $100,000/$2,900,000 x 100 = 3.4% for eight months, equivalent to 5.2% interest annualized.  (Note:  The full payment comes from the Illinois tax credit, not the production company, and therefore the "interest" is not income.)

The producers budget spending $10 million in Illinois.  The loaning entity or individuals provide a loan of $2.9 million.  After six to eight months, Illinois provides our production company the $3 million tax credit which is then transferred to the loaning entity or individuals.  With that $100,000 paid back in interest, the earnings on the loan is $100,000/$2,900,000 x 100 = 3.4% for eight months, equivalent to 5.2% interest annualized.  (Note:  The full payment comes from the Illinois tax credit, not the production company, and therefore the "interest" is not income.)

===Federal Deduction===

===Federal Deduction===

===Production and Compliance===

===Production and Compliance===

The success of this project and the viability of its presentation to clients by "Accountant_firm_name" requires that the producers guarantee that the funds loaned to the production company are appropriately spent.  Therefore, numerous steps will be taken to ensure compliance with 35 ILCS  16/.

The success of this project and the viability of its presentation to clients by an accountant firm requires that the producers guarantee that the funds loaned to the production company are appropriately spent.  Therefore, numerous steps will be taken to ensure compliance with 35 ILCS  16/.

a.  The producers create a detailed production budget using film industry standard line production software,

a.  The producers create a detailed production budget using film industry standard line production software,

For an up to eight month loan of $2.9 million, the loaning entity or individuals receive $3.0 million (Illinois income tax credit) + $2.9 million (Federal income tax deduction) = $5.9 million in consideration.  Based on a 20% corporate federal tax bracket, the net "earnings" are $100,000 + $580,000 = $680,000.  That yields an annualized 35% return on the $2.9 million.  Based on a 35% individual federal tax bracket, the return is equivalent to an annualized 58% return.

For an up to eight month loan of $2.9 million, the loaning entity or individuals receive $3.0 million (Illinois income tax credit) + $2.9 million (Federal income tax deduction) = $5.9 million in consideration.  Based on a 20% corporate federal tax bracket, the net "earnings" are $100,000 + $580,000 = $680,000.  That yields an annualized 35% return on the $2.9 million.  Based on a 35% individual federal tax bracket, the return is equivalent to an annualized 58% return.

Please note that neither the state nor federal tax credit/deduction is based on the motion picture earning any profits.  They result solely on expenditures during production being made in the state of Illinois and the United States.

<b>Please note that neither the state nor federal tax credit/deduction is based on the motion picture earning any profits.  They result solely on expenditures during production being made in the state of Illinois and the United States.</b>

In addition, as investors, the loaning entity or individuals would receive a proportion of the profits earned by the film.  The film will be distributed in all modes, for domestic and international box office, in electronic media, and in ancillary distribution.

In addition, as investors, the loaning entity or individuals would receive a proportion of the profits earned by the film.  The film will be distributed in all modes, for domestic and international box office, in electronic media, and in ancillary distribution.

Strict compliance with the terms of 35 ILCS  16/ is assured by daily accounting during the filming of the motion picture.

Strict compliance with the terms of 35 ILCS  16/ is assured by daily accounting during the filming of the motion picture.

Our entertainment lawyer has drafted a complete prospectus if you wish to receive a copy.  This highlights the risks of investment in film production, but as noted the state and federal tax benefits of the loan are independent of whether or not the film makes a profit.  The prospectus would provide information on the potential profitability of the motion picture.

The producers’ entertainment lawyer has drafted a complete prospectus if you wish to receive a copy.  This highlights the risks of investment in film production, but as noted the state and federal tax benefits of the loan are independent of whether or not the film makes a profit.  The prospectus would provide information on the potential profitability of the motion picture.

We and our attorney would be happy to discuss our proposal further with you, your staff, and your counsel at your convenience.  A representative of the Illinois Film Office would be happy to attend.

The producer, with their attorney, would be happy to discuss this proposal further with accountant firms and their counsel at their convenience.  A representative of the Illinois Film Office would be happy to attend.

==Contact==

==Contact==