Expensing opportunities for qualified sound recording productions
The One Big Beautiful Bill Act (OB3) adds a new category of assets, known as “qualified sound recording productions” (QSRs).
The new category of assets (QSRs) is generally eligible for elective upfront expensing under Section 181 for a limited time and permanent 100% bonus depreciation once placed in service. Additionally, the OB3 reinstates and modifies certain provisions that previously phased out or expired from the Tax Cut & Jobs Act (the TCJA), including:
- Permanent reinstatement of 100% bonus depreciation under Section 168(k)
- Permanent reinstatement of EBITDA when determining adjusted taxable income (ATI) for purposes of the interest expense limitation under Section 163(j)
Similar to the addition of qualified film, television, and live theatrical productions to bonus depreciation by TCJA, the new treatment afforded the costs of producing QSRs will have a significant impact to both film and television producers, as well as music and podcast companies, producing sound recordings in the US.
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Expensing opportunities for qualified sound recording productions in 2025 and beyond
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