PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.

SEC. 502. PROVISIONS RELATED TO FILM AND TELEVISION PRODUCTIONS.(a) Extension of Expensing Rules for Qualified Film and Television Productions.—Section 181(f) (relating to termination) is amended by striking “December 31, 2008” and inserting “December 31, 2009”.(b) Modification of Limitation on Expensing.—Subparagraph (A) of section 181(a)(2) is amended to read as follows:“(A) In general.—Paragraph (1) shall not apply to so much of the aggregate cost of any qualified film or television production as exceeds $15,000,000.”.(c) Modifications to Deduction for Domestic Activities.—(1) Determination of w–2 wages.—Paragraph (2) of section 199(b) is amended by adding at the end the following new subparagraph:“(D) Special rule for qualified film.—In the case of a qualified film, such term shall include compensation for services performed in the United States by actors, production personnel, directors, and producers.”.(2) Definition of qualified film.—Paragraph (6) of section 199(c) is amended by adding at the end the following: “A qualified film shall include any copyrights, trademarks, or other intangibles with respect to such film. The methods and means of distributing a qualified film shall not affect the availability of the deduction under this section.”.(3) Partnerships.—Subparagraph (A) of section 199(d)(1) is amended by striking “and” at the end of clause (ii), by striking the period at the end of clause (iii) and inserting “, and”, and by adding at the end the following new clause:“(iv) in the case of each partner of a partnership, or shareholder of an S corporation, who owns (directly or indirectly) at least 20 percent of the capital interests 122 STAT. 3877 in such partnership or of the stock of such S corporation—“(I) such partner or shareholder shall be treated as having engaged directly in any film produced by such partnership or S corporation, and“(II) such partnership or S corporation shall be treated as having engaged directly in any film produced by such partner or shareholder.”.(d) Conforming Amendment.—Section 181(d)(3)(A) is amended by striking “actors” and all that follows and inserting “actors, production personnel, directors, and producers.”.(e) Effective Dates.—(1) In general.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to qualified film and television productions commencing after December 31, 2007.(2) Deduction.—The amendments made by subsection (c) shall apply to taxable years beginning after December 31, 2007.