Changes

The Illinois film office, our accountant, and our entertainment lawyer agree that the amount of money loaned can be considered an investment under U.S.C. 181.   

The Illinois film office, our accountant, and our entertainment lawyer agree that the amount of money loaned can be considered an investment under U.S.C. 181.   

====Example A====

====Example A – Individuals====

If a single corporation provides the entire loan, its loan-investment of $2.9 million results in a $2.9 million federal deduction.  For those in, for example, the 20% tax bracket, this results in a tax savings of $580,000.  The earnings on the loan from this source is $580,000/$2,900,000 x 100 = 21% for eight months, equivalent to 31% interest annualized.

In this example, ten individuals provide the loan based on their relative gross incomes. The results for their considerations based on both the Illinois tax credit and the federal deduction are provided in the table.  The individuals are assumed to be in the 35% federal tax bracket.  The annualized return resulting from the total of the Illinois tax credit and the federal deduction is 58%.

 

NOTE: If the following Table is not visible in your browser, go directly to the Table here:</br>[[Media:Taxincentives.jpg]]

 

[[File: Taxincentives.jpg|thumb|center|600px|<small> The Illinois income tax credit and federal income tax deduction basis for funding of <i>Never Split Tens</i>. </small>]]

====Example B====

====Example B – Corporate====

In this example, ten individuals provide the loan based on their relative gross incomes. The results for their considerations based on both the Illinois tax credit and the federal deduction are provided in the table.  The individuals are assumed to be in the 35% federal tax bracket.  The annualized return resulting from the total of the Illinois tax credit and the federal deduction is 58%.

If a single corporation provides the entire loan, its loan-investment of $2.9 million results in a $2.9 million federal deduction.  For those in, for example, the 20% tax bracket, this results in a tax savings of $580,000.  The earnings on the loan ($580,000+$100,000)/$2,900,000 x 100 = 23% for eight months, equivalent to 35% interest annualized.  

NOTE:  If the Table is not visible in your browser, go directly to the Table here:</br>[[Media:Taxincentives.jpg]]

NOTE:  If the following Table is not visible in your browser, go directly to the Table here:</br>[[Media:Taxincentivescorporate.jpg]]

[[File:Taxincentives.jpg|thumb|center|600px|<small> The Illinois income tax credit and federal income tax deduction basis for funding of <i>Never Split Tens</i>. </small>]]

[[File: Taxincentivescorporate.jpg|thumb|center|600px|<small> The Illinois income tax credit and federal income tax deduction basis for funding of <i>Never Split Tens</i> for corporations in a given federal tax bracket.</small>]

===Investor Share of Profits===

===Investor Share of Profits===