[gruez]

>Writing that off as a loss should be considered fraud, especially when there's an offer for it.

From wikipedia:

>In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Where's the deception here?

[dymk]

It's defrauding the taxpayer

[gruez]

"fraud" doesn't mean "losing money in a manner I don't like", so I ask again: where's the deception here?

[dymk]

That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded.

They would rather delete the movie to claim the tax break than sell it to another studio offering more than the tax break.

If you think they actually lost that amount of money: https://en.wikipedia.org/wiki/Hollywood_accounting

[gruez]

> That they actually incurred the losses they claim to have incurred, so they get a tax break. The taxpayer is defrauded.

Did they not incur such losses? Did they claim to delete the movie but actually kept a backup? Granted, the loss is self-inflicted, but that's not a relevant factor in the tax code.

[lisper]

Destroying a movie to claim the tax break is analogous to burning your house down for the insurance money or to claim a casualty loss. Yes, you really did lose your house. No, you are not entitled to claim it as a write-off.

[gruez]

>insurance money

That's fraud because the insurance policy specifically says it won't pay out if you intentionally set it on fire. If you actually did set it on fire, then claimed that you didn't then that's the deception.

>No, you are not entitled to claim it as a write-off.

Can you point to the relevant tax law that prevents this?

[prepend]

> analogous to burning your house down for the insurance money

It’s very different because insurance pays out to make whole. Taxes are just taxes.

It’s the equivalent of burning your house down and then writing off the depreciated value because it burned down. Totally legal. Because it’s worth less after burning it down. Assuming you burn it in a legal, controlled manner and not arson.

[peterleiser]

Businesses are allowed to destroy inventory and then write that off. In this case I guess the movie is the inventory.

[s1artibartfast]

nobody is paying the company money.

It is closer to burning down your house to avoid property or sales tax.

[ok_dad]

If I burn down my house and claim insurance or tax losses, they’ll laugh and send me to jail. Explain how a corporation doing the effectively the same thing should get a write off. It’s a sham.

[gruez]

In your scenario the illegal parts would be:

1. claiming insurance on it. AFAIK this isn't applicable in the case of the movie

2. endangering other houses by doing it in a non-approved way

Other than that setting houses that you own on fire isn't illegal.

[shadowgovt]

It's not the same because the tax code is, even more than the rest of the law, really just made up.

It just tells you when you have to pay and when you don't have to pay. If they didn't explicitly write in that you're not allowed to burn a movie, then burning a movie gets you a tax break. End of.

[travisjungroth]

A company buys a balloon making machine for $100k. They use the machine and depreciate it over the years to $20k, getting $80k of deductions over the years. They decide to stop making these balloons. Someone offers them $1k but they decline. They destroy the machine, and have a $20k loss on their taxes.

This is all above board, totally normal behavior. There are reasons to be against destroying these movies, but tax fraud really isn’t one of them. They actually did take the loss of whatever was the remaining value of that asset.

[nirvdrum]

The deductible losses are supposed to be incurred in pursuit of profit. Not every expense a business incurs is tax deductible. Not even trying to sell it calls into question whether it was in pursuit of profit. They’re expecting the American tax payer to make up the shortfall and that’s likely based on Hollywood’s unique accounting practices, which has a tendency to inflate the claimed expense amount.

[gruez]

>Not every expense a business incurs is tax deductible.

True, there are multiple reasons why some expenses aren't deductible, but AFAIK no such exception exists for "intentionally destroying it".

>and that’s likely based on Hollywood’s unique accounting practices, which has a tendency to inflate the claimed expense amount.

See my other comment here: https://news.ycombinator.com/item?id=39339493

There's no way that you can save taxes by doing this.

[jrflowers]

You make a good point. When somebody says something should be illegal, the clever route of discussion is to repeatedly point out that it is not currently illegal — a fact that both of you agree about, since that is the premise for making the statement that it should be illegal.

[2OEH8eoCRo0]

We aren't arguing that it's tax fraud by definition, but that it should be considered fraud. If the tax code incentivizes destroying something then that seems like a defect of the tax code.

[gruez]

If you re-read my prior comment, you'd see my complaint is that it's not "fraud" by any reasonable definition because deception is not involved, not that it should or should not be allowed.

> "fraud" doesn't mean "losing money in a manner I don't like", so I ask again: where's the deception here?

[AlbertCory]

the deception is assigning a zero value to the movie, when it's not zero.

[gruez]

It is zero when the hard drive holding the only copy is degaussed.

[AlbertCory]

no, if you had an offer for $30M, then that was the value.

[gruez]

And the value went to $0 after destroying it. I don't see what's the issue is here.

[glitchc]

How so if funded by private capital?

[dymk]

The studio is effectively funded by taxpayer dollars (the tax writeoff)

[glitchc]

Tax write-off means you don't pay the taxes. It doesn't mean a full refund of 100% of the cost by the government.

[ClassyJacket]

That they lost money on the film.

[gruez]

If you spent a bunch of time and resources making a movie, and then decide to shred it, did you not lose money?

[exe34]

If I burn down my house, I lose money. Should I be able to claim insurance on that?

[gruez]

If your insurance policy covers that (unlikely because of this exact situation), then sure.

[aniforprez]

No insurance company in the world will pay out insurance if you commit arson against your own house because that's stupid. Same thing should apply here. Destroying a film to get a tax break at the very least should incur penalties

[MrNeon]

The penalty is that they lose money at the end of the day. It is not a sustainable business practice.