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Taxation in Independent Documentary Films

Posted By Brandon Shelton, Apr 11, 2012

Smile ‘Til it Hurts is a film that analyzes the singing group Up With People, who traveled the world to spread a message of cheer through song. By digging deep into never before seen footage and obtaining new interviews, it aimed to expose the idea that Up With People’s “cheery façade concealed the more complicated reality of an organization founded on conservative American ideals and cult-like utopian ideology.”[1] In Storey v. Commissioner of Internal Revenue, Tax Court Judge Diane Kroupa considered whether or not Lee Storey, the film’s director and producer, could deduct expenses she incurred from her income.[2] Under IRC § 162, a taxpayer may deduct “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” However, under IRC § 183, “no deduction attributable to [activities not engaged in for profit] shall be allowed” except “to the extent that the gross income derived from such activity for the taxable year exceeds the deductions allowable”.

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Minnesota’s Pivotal Role in Resolving Labor Disputes Between Players Associations and Professional Sports Leagues: A Tale of Forum Shopping?

Posted By E. Jayson Nayagam, J.D. Candidate, Class of 2014, Jan 23, 2012

Research Assistant: Hovannes G. Nalbandyan, J.D. Candidate, Class of 2014

Professional sports leagues have been all too familiar with labor disputes in recent history. Just recently, the National Basketball Association (NBA) ended a half-season long lockout to salvage half of its season. Deep into the summer of 2011, the National Football League (NFL) narrowly averted the cancellation of games after reaching an agreement with the NFL Players Association (NFLPA). Major League Baseball (MLB), and the National Hockey League (NHL) lost entire seasons in the not too distant past; MLB lost the entire 1994-1995 season while the NHL lost the entire 2004-2005 season. Such disputes, whether they result in the loss of games or merely elicit turmoil in the sport, test the mettle of fans and can potentially harm the brand name of sports leagues. Die-hard and casual fans alike undoubtedly have numerous avenues on which to spend their discretionary income: average citizens often have little sympathy for the squabbles between millionaire athletes and billionaire owners.

Aside from the obvious economic losses (in the form of lost salaries, revenue, and profits) that result from extended labor disputes, both the players associations and owners face increased pressure to maintain their sports and brands in the crowded twenty-first century entertainment landscape. In trying to resolve these disputes, players associations have sought relief from the Minnesota federal courts (in the 8th Circuit), a forum that historically has handed down favorable decisions to them. Relying primarily on anti-trust law, players associations have attacked owners’ regulation of topics from free agency to salary caps, arguing that such devices restrict trade. The Court’s opinions in Mackey v. NFL and Reynolds v. NFL spurred the implementation of more liberal free agency rules while also promoting trades between teams [1].

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