IRS Section 181 Extension Is Gift To Affluent Private Equity Investors, Financial Advisors, CFO's, Corporations, Portfolio Managers

Online, December 19, 2010 (Newswire.com) - President Barack Obama's New Federal Tax Law which extends IRS Section 181 is a blessing for affluent high net worth individual investors and corporations who wanted to utilize Federal IRS Section 181 of the American Jobs Creations Act to invest in film ,movies, media & entertainment as a strategic investment hedge as part of their overall investment portfolio.

Apart from high net worth investors such as Steven Rales (Danaher), Jeff Skoll (Ebay), Larry Ellison (Oracle), Len Blavatnik, Fred Smith (Fedex), Norman Waitt, the Co-Founder of Gateway Computers, , Marc Turtletaub of The Money Store, Sidney Kimmel Of Jones Apparel Group, Minnesota Twins owner Bill Pohlad, the New York Times recently did a large article on investing in film covering the many different investors looking at Hollywood http://www.nytimes.com/2010/11/15/business/media/15cash.html?_r=1 that are coming from different backgrounds including oil & gas executives, real estate entrepreneurs, CEO's of companies, hedge fund managers, and others that understand film investment as a non-correlated asset class.

"An individual or company who makes an investment into Section 181 qualified film or group of films can take a 100% deduction of their investment against their passive income as a individual, and, 100% deduction of their investment against their ordinary income as a corporation in the year their investment was made", states Yuri Rutman, CEO of Noci http://www.noci.com which structures and advises on risk minimized film financing for investors.

The American Jobs Creation Act Of 2004, the 2004 enactment of Section 181 of the Internal Revenue Code of 1986 (the "Code") marked an unprecedented change in U.S. policy toward the phenomenon known as "Runaway Production".

Runaway Production refers to a film or television production that leaves one state or country to be filmed in another purely for economic reasons. This movement occurs because producers tend to film in the location where they can minimize production costs through tax incentives, cheaper labor.

Over the years, Canada has been the greatest beneficiary of U.S. runaway productions (according to some reports, Canada has claimed up to 80% of the U.S. runaways, generating an economic impact of $10.3 billion in production output in 1998 alone).

Section 181 permits a 100% deduction for the cost of certain audio-visual works, regardless of what media they are destined for (e.g., theatrical, television, DVD, etc.).

Rutman's Chicago based company is setting the stage in educating interested investors, family offices, money managers, financial advisers, fund of funds, hedge fund managers, and private equity groups on why investing in the film business is really an investment into a manufacturing and distribution company

"What is great about IRS Section 181 is that it tells investors that film investing is not a sexy vehicle to mingle with the stars", states Rutman. "Investing in film is really an investment into a manufacturing industry that has short and long term value in terms of tax benefits, global tax credits that are monetized as cash and flow to investors, job creation, multiple-revenue streams, and varying degrees of exit strategies. If you combine the different incentives, cash rebates, leverage some pre-sales on large films, you can see a 50-100% ROI on your investment before actual revenues", Rutman adds".

Recently, Fortress Investments, one of the biggest private equity groups bought out the initial investors of Legendary Pictures which may have included Honeywell Pension Funds, MC Ventures, Arbry Partners, and others.

"Its not just the dentist or plastic surgeon looking for a vanity investment", states Rutman. "When self made billionaires like Fred Smith of FEDEX or hedge funds like Elliott Associates are investing in films, the question that every investor needs to ask is 'why'?"

"What we are also scaling and educating investors on, that an investment in film is risky if the pipeline for distribution is a gamble", "Rutman continues. "In our model, our equity reserve guarantees a theatrical release whether its on 100 screens or 3000 screens which give investors a higher level of transparency in revenues".