| how do investors in a non profit production make money | |
| Posted by: | actor103 11:06 pm EDT 08/08/14 |
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| I know of people who put money into War Horse which was a non profit production produced by commercial producers with Lincoln Center. The investor I know did great with War Horse. Does anyone know how that works. Really think I want to do this with a show that I love. A lot of people are suggesting that non profit is the way this show could work. I want to help the producers make this happen. So I have a couple of questions. Would really appreciate advice. 1. How would I get profit from a non profit production? 2. I could afford to lose maybe 50k. What is the standard minimum investment for a musical? Is there one? 3. Although, I am willing to lose this money, I was wondering if there is a tax advantage for a non profit investment should the show, in fact, not recoup? 4. For 50k could I get billed as a producer and be eligible for a Tony? This is not why I would do it. But just curious about the perks are for investors at that level. 5. Are investors always invited.to the opening and after party. I would HAVE to be able to enjoy that. 6. Has anyone done this. When it was over did you regret losing the money ( if that is what happened.) I always regretted not doing this once before and want to try this one time. I am not rich by any means but I am totally cool losing the money this one time. Thanks in advance for any knowledgeable response to these questions. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | garyd 07:00 pm EDT 08/09/14 |
| In reply to: | how do investors in a non profit production make money - actor103 11:06 pm EDT 08/08/14 |
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| Wasn't "War Horse" and "enhanced" production between LCT and commercial producers? If so, your friend may have invested with the commercial producers. | |
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| think I got an answer to my question | |
| Posted by: | actor103 10:51 pm EDT 08/10/14 |
| In reply to: | re: how do investors in a non profit production make money - garyd 07:00 pm EDT 08/09/14 |
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| Spoke with someone today who said roughly, the following: Producers create an LLC which enhances the non - profit (np) production.. Upon recoupment of costs to the np, there is a box office split. X% to np and X% to the enhancing LLC. People who invested in the LLC get their proportion of this draw of which 50% goes to the general Partners of the LLC and 50% to the investors. Someone can either Invest in the llc or give a tax deductible donation to the np. In which case, they do not get a % of the draw but do get a right off. So, pretty straight forward, I guess. | |
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| what surprises me is the investment returned is taxed | |
| Posted by: | dramedy 06:56 pm EDT 08/09/14 |
| In reply to: | how do investors in a non profit production make money - actor103 11:06 pm EDT 08/08/14 |
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| And not offset. So you put in 100k. The show returns 10k. That money is taxed and not offset as investment. I think they want to change the tax law. But it really means you need to get back 120k to break even. As for your question, I assume the non profit gets its share and that is taxed accordingly. You would get your share and taxed by whst tax laws apply to you. | |
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| re: what surprises me is the investment returned is taxed | |
| Posted by: | ryhog 10:07 pm EDT 08/09/14 |
| In reply to: | what surprises me is the investment returned is taxed - dramedy 06:56 pm EDT 08/09/14 |
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| this is not the place to get into taxes but what you have described is not correct. | |
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| variety had an article on june 28 2013 | |
| Posted by: | dramedy 02:48 pm EDT 08/10/14 |
| In reply to: | re: what surprises me is the investment returned is taxed - ryhog 10:07 pm EDT 08/09/14 |
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| That stated the law was going to be changed so that investors didn't have to pay taxes on income until the show recoups for shows undrr 15m. Id link the article but I cant cut and paste ljnks on my tablet. The srticle csn be found with broadway investment tax variety. its about the 6th paragraph down | |
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| re: variety had an article on june 28 2013 | |
| Posted by: | ryhog 03:30 pm EDT 08/10/14 |
| In reply to: | variety had an article on june 28 2013 - dramedy 02:48 pm EDT 08/10/14 |
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| What you said was that the investor was taxed on what was returned to them, which is incorrect. The taxation is on the earnings of the corporation during the year, irrespective of any return of capital to investors. And what the lobbyists argued in this new law was for a tax break-putting stage shows on par with films, but giving them a benefit other companies don't get. | |
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| ok | |
| Posted by: | dramedy 06:03 pm EDT 08/10/14 |
| In reply to: | re: variety had an article on june 28 2013 - ryhog 03:30 pm EDT 08/10/14 |
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| I guess I misinterpreted the article. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | pitslre 05:04 pm EDT 08/09/14 |
| In reply to: | how do investors in a non profit production make money - actor103 11:06 pm EDT 08/08/14 |
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| Can't address the non-profit question...but some of the others are more general so here are my answers to those: 2. Depends on the show and demand. Units are generally $25k for musicals these days. 3. Doesn't matter (as far as I know) whether it's a nonprofit production or not...it's still treated as a capital loss. Ask your tax advisor. Also keep in mind that most people are looking for qualified investors (you either make $200k+ annual or are worth $1M not including residence) 4. Doubtful. Usually for musicals in particular it's at least $250k and often more. 5. Exceptions to the rule, but generally less. 6. Many times over and haven't regretted. Generally speaking for me it hasn't been most lucrative investment class...but it's fun and as long as I'm more or less breaking even I don't care. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | actor103 05:45 pm EDT 08/09/14 |
| In reply to: | re: how do investors in a non profit production make money - pitslre 05:04 pm EDT 08/09/14 |
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| Hey, really appreciate that. I have sort fallen in love.with.The Visit. I am just thinking that they will end up doing something in the non-profit world. I found a "by special arrangement" credit at the bottom of the billing page in the program. I did a little research and am assuming these are the people I should contact. Would that make sense? I have not had my call returned from Williamstown. That is where I started. I am sure they can tell me. If they call, that is. This obviously not something that will make me tons of money but, what can I say....always wanted to do this. Musicals are not really my first love when it comes to theater. Though,that could change if they were more like this. Meaning, not a juke box show or movie adaptation, tourist trappy sort of thing. Anyway, thanks again.Any additional, thoughts suggestions, advice would be much appreciated. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | garyd 06:57 pm EDT 08/09/14 |
| In reply to: | re: how do investors in a non profit production make money - actor103 05:45 pm EDT 08/09/14 |
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| I don't think any of the NYC NFP theatre companies are L3C's (has NY even legislated the L3C?). Therefore you would not be "investing" in a NFP production of "The Visit', you would be making a donation to a 501©3. That is about all I can say on this forum. However, if you have the resources to invest or donate and you are a qualified investor then you probably should have a tax advisor. Ask the advisor. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | ryhog 10:06 pm EDT 08/09/14 |
| In reply to: | re: how do investors in a non profit production make money - garyd 06:57 pm EDT 08/09/14 |
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| I don't think NY ever passed the law, but it would not have application to what is being discussed here in any event. There is no such thing as investing in a NFP production. One can, as you say, donate and one can "enhance" which is a contribution in connection with a right of first refusal for the rights to (commercially) produce a show that starts in a non-profit. A non-profit can invest (subject to caveats) in a commercial production, and can also obtain points in consideration of its undertaking. I fully agree that the OP should get counsel on everything, and most of the remaining questions of the OP really require interacting with someone offering a deal. Depending on the property, what is offered for what can vary greatly although what you've said sounds generally right, with the caution that (as I am fond of saying) there are no rules on these matters. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | actor103 11:47 pm EDT 08/09/14 |
| In reply to: | re: how do investors in a non profit production make money - ryhog 10:06 pm EDT 08/09/14 |
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| I do have a tax advisor. He said I qualify. But...He laughed and told me I was crazy for investing in theatre plus a few choice observations about the business of theater and how ludicrous the deals are. He knew nothing about investing in a non-profit production though he had all the 501 c 3 donation info. He clearly does not think that the industry has much understanding of business. I could almost hear him shaking his head. That's ok. We all do crazy things for love. At any rate got an office number for one of the producers. Wish me luck. Thank you for all the advice. Very much appreciated. | |
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| re: how do investors in a non profit production make money | |
| Posted by: | ryhog 11:14 am EDT 08/10/14 |
| In reply to: | re: how do investors in a non profit production make money - actor103 11:47 pm EDT 08/09/14 |
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| There is an esteemed producer who shall go nameless here who likes to rag on accountants. The theatre is a high risk business, and accountants are by nature risk averse, he reminds, but "I don't see many accountants at parties in the Hamptons." Successful producers don't operate on love or luck, and they don't do crazy things (not very often at least). Everyone miscalculates but those who are successful are only crazy like a fox. | |
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| lol... | |
| Posted by: | garyd 12:04 pm EDT 08/10/14 |
| In reply to: | re: how do investors in a non profit production make money - ryhog 11:14 am EDT 08/10/14 |
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| I guess I agree with everything except "accountants at parties in the Hamptons". In reality they eat the most food and drink the most booze. And, of course, accountants are "ragged "on by upper management in every business. If you're not ragging on your accountant then your accountant ain't doing his job. | |
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| :) | |
| Posted by: | garyd 10:36 pm EDT 08/09/14 |
| In reply to: | re: how do investors in a non profit production make money - ryhog 10:06 pm EDT 08/09/14 |
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| Well,in my experience, being" generally right" in this business is about as good as it gets. | |
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| re: :) | |
| Posted by: | ryhog 11:34 pm EDT 08/09/14 |
| In reply to: | :) - garyd 10:36 pm EDT 08/09/14 |
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| absolutely. only horseshoes is better. | |
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