Sorry, I must have missed the “no fun allowed” sign
Don’t get me wrong, I’m just curious how it works because I keep seeing it mentioned, and it’s just frustrating that nobody ever explains it!
Then they claim the films are literally worse than worthless, and report all expenses incurred as loss, which lowers their tax burden.
Yes I get that part, but I don’t get how they are better off with that? If a company has a profit of 10 million, then they burn 2 million on a manufactured loss, they only have to pay tax on 8 million of profit. Makes sense. Let’s say the imaginary tax here is 50%. They could have got 5 million after tax, but after this maneuver they only get 4 million after tax. So it doesn’t make sense. What am I missing?
Your comment is spot on but doesn’t answer my question.
Don’t get me wrong, I’m just curious how it works because I keep seeing it mentioned, and it’s just frustrating that nobody ever explains it!
Yes I get that part, but I don’t get how they are better off with that? If a company has a profit of 10 million, then they burn 2 million on a manufactured loss, they only have to pay tax on 8 million of profit. Makes sense. Let’s say the imaginary tax here is 50%. They could have got 5 million after tax, but after this maneuver they only get 4 million after tax. So it doesn’t make sense. What am I missing?
Your comment is spot on but doesn’t answer my question.