> Fundamental to the whole premise of taxes is that they are applied to net profit. If a company spends $1 to make $10, they get taxed on $9. If they spend $8 to make $10, they get taxed on $2.
Yes, the key word there is net profit, and the ways to calculate net profit for tax purposes are prescribed by law. Not every single penny a company spends is automatically a deductible business expense. Some things are, some things partially are, some have to be amortized over time, some are not deductible at all. There's thousands of pages of tax law delineating this and it is not in the slightest without precedent to declare a particular expense non-deductible.
So there is a moral argument for what an ideal world should be like, and legal argument for what the rules are.
From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money.
Now you pivot to the legal argument. The current law clearly supports what Warner Bros is doing, so that doesnt help you either.
like I said before. It seems like this entire thing boils down to a control issue. you dont like how WB is running their company and doing with their property.
It isnt you business, both figuratively and literally.
> From the moral perspective, it is clear that WB clearly had real expenses. They spent money, bought rights, and tons of workers were paid good money.
Yes, they had expenses. You seem to have a very very rudimentary understanding of accounting and have conflated expenses with losses. An expense is not a loss. If you buy a factory for $1 million, you didn't lose $1 million dollars. You now have an asset, a factory, that is worth approximately $1 million. You don't get to go to the IRS and say "I lost $1 million dollars this year because I bought a factory". The IRS will tell you, no you didn't. You still have your $1 million, it's just now in the form of a factory instead of cash.
Likewise, WB spent money and created an asset, a film. That film has a market value. Maybe they don't like the film, but that doesn't change the reality that it's worth something. We know approximately how much it's worth because several other companies made offers to buy it.
Instead WB wants to lie and say it isn't worth anything. So, no I don't like how they are running their company when they want to lie and cheat to get out of paying the taxes they owe. You can't buy a factory for $1 million and then turn around and say "yeah, it's not worth anything anymore", and you shouldn't be able to say a movie isn't worth anything when it very clearly is. We do not gain anything by enabling companies or anyone to deny reality.
No it’s not. If someone offered $10 million for the movie and they chose to destroy it instead, then destroying the movie had a value > $10 million to them because they chose that over the money. If it were worth zero, then why wouldn’t they take $10 million in exchange for something they believe is worth $0?
I already answered that. Because the value of doing so is greater than $10 million. Hence, the value of the movie is NOT $0, even when it is deleted they still retain the exclusive rights and that has value. So to say the value is $0 is a lie. When the movie studio claims “Oh boo hoo our movie is worth $0 we need to write it all off” They are lying and the IRS should call it for the bullshit it is and make them take a smaller reduction for the expenses minus the residual value of the movie.
I think you fundamentally misunderstand what's being written down to zero. The movie is being written down to zero, not all of these extended rights and IP you're talking about.
That's how a company can lose more money on a $10 million sale then deleting it. If you have to include more than $10 worth of IP or obligations with the sale is a negative return. Alternatively, selling a movie could cost you more than $10 million in losses on a different movie.
These are all legitimate reasons to destroy instead of sell it. Avoiding costs are fundamentally different than increased Revenue for the purpose of taxes, even if they're monetary value is the same. Cost avoidance is not taxable value creation.
I can save $20 in laundry fees by not shitting in my bed, but I don't pay taxes on the value I saved. This is for two reasons. First, I'm no richer off after not shitting in my bed then I was before. Second, the alternative is I would have to pay taxes on every second of every day I chose not to shit in my bed.
I don't think that any retained rights are being valued at zero, besides the distribution rights to a a movie that doesn't exist.
If they keep the rights to develop a script, for example, that would have some tiny residual value.
They’re not avoiding any costs by selling the movie. They would just have a smaller loss than if they didn’t sell it. They don’t have to sell the entire rights to the underlying IP, just the one movie. Nobody is taxing anyone for avoiding losses.
You clearly have some kind of philosophical objection to taxes in general and a very confused notion that companies are allowed to just deduct anything they want without any restrictions and that is not how this works in the slightest.
This isn’t complicated. If you make a movie and release it and nobody goes to see, ok you lost money, write it off. If you make a movie and it’s not working out and you sell the rights to someone else to cut your losses, ok you lost money, write it off. If you make a movie and then you’re like “jk lol I just want tax deductionz plz.” No, screw you. You’re just playing games with the tax system instead of making movies, so fuck off.
Yes, the key word there is net profit, and the ways to calculate net profit for tax purposes are prescribed by law. Not every single penny a company spends is automatically a deductible business expense. Some things are, some things partially are, some have to be amortized over time, some are not deductible at all. There's thousands of pages of tax law delineating this and it is not in the slightest without precedent to declare a particular expense non-deductible.