Tuesday, September 8, 2009

Simplified version of film investment.

Film investment is ordinarily not for the faint of heart or pocketbook, but the availability of two incredibly generous tax incentives for production this year make it a no brainer.

1. IRS Section 181, 199, allows taxpayers to deduct 100% of the money spent on a film production. Those in the highest bracket would immediately get 35%.

2. Iowa law allows for a 50% tax credit on monies spent in the state on film production. Though this usually has to be discounted some when selling the credits, it allows for at least 85% of the face value to be kept.

3. On our $500,000 budget we've already received our Iowa contracts, as well as $250,000 in commitments to the budget that will not participate in the tax credits.

4. Distribution guaranteed.

For example:

$250,000 invested for maximum of 90 days.

Gets:
$80,000 federal tax write off for 35% bracket
$215,000 from Iowa tax credits after discount and broker fees.
20% ownership in the finished film and future profits from distribution.
Total $295,000

Also there will be an opportunity to reinvest funds to avoid taxes on the income for another year.

Unfortunately, the federal break expires Dec. 31, unless it is extended, as it was last year, so it's now or never.

Film to shoot this Fall.

The company was profiled recently in both the Non Pareil and Omaha World Herald.



Council Bluffs

Tax incentives lure film companies to the Bluffs
By Kim Bousquet, Staff Writer, kbousquet@nonpareilonline.com
Published: Saturday, August 8, 2009 12:22 AM CDT
An 18-year-old film company headquartered in Los Angeles has relocated to Council Bluffs.

Native Omahan Steve Lustgarten, the president of the film distribution and production company LEO Films, readily admits Iowa’s film incentives lured the company to the Midwest.

“The Iowa tax credits attracted me,” said Lustgarten.

In May 2007, Iowa began offering filmmakers financial incentives to produce their projects in Iowa. The state gave transferable income tax credits valued up to 50 percent of the total qualified spending in Iowa.

In addition, Iowa has provided a benefit to vendors by allowing them to adjust their gross annual income by excluding their income from registered projects.

A number of changes took effect July 1 this year, making the state an even more attractive location. Under the original program terms, no pay to the director, principal producer or principal talent was eligible toward the total qualified spending in Iowa – even if those people were themselves Iowans. Now, portions of pay to the director, principal producer or principal talent are eligible if the project’s total qualified spending meets qualified spending guidelines.

The incentives seem to be working. According to the Iowa Film Office Web site, just two movies were filmed in 2006. Fourteen films were made or shot scenes in Iowa since 2007.

“The legislation helps attract film companies,” said Bob Mundt, president and CEO for the Council Bluffs Area Chamber of Commerce. “But we’d also like to think our beautiful city, convenient location and affordability make Council Bluffs an ideal place to make a movie. We’d love to do more.”

More films have been shot in the area since “The Scientist” and have yet to be added to the Film Office’s list. In July, Rrel Entertainment stayed in Council Bluffs for its work on a documentary about RAGBRAI, a popular annual bike ride across Iowa.

According to the CVB, two other production companies are on the books to shoot here, not including LEO Films. A horror comedy is being filmed in the area, and Ten/Four Pictures is filming the dark romantic comedy, “Lucky,” in town.

More films being shot in the area means more money is pumped into the local economy.

“We love having movies filmed in Council Bluffs because the crew stays in our area hotel rooms. Sometimes film crews need office space, extra actors, and the crews certainly need food, fuel and entertainment in the off-hours. All those expenses mean a direct economic impact of over $150,000. Overall that means nearly a half-million dollar impact in indirect benefit for Council Bluffs,” said Josee Beier, director of Convention Sales for the CVB.

Lustgarten and LEO Films have already relocated to the area, though no offices are set up. The plan is to begin shooting the feature-length thriller “My Own Blood,” written, directed and produced by Lustgarten, this month.  Lustgarten expects filming to take three to four weeks.

Still in the planning stages, the scenes will be shot mostly around the Bluffs, using locations like houses, apartments and restaurants as backdrops for scenes. For some scenes, though, shooting may be done in Des Moines.

The cast and crew will be mostly local hires, as Lustgarten brought no one along with him in the film company’s move. He said the cast will be between 12 to 15 people, with about 10 to 20 extras. The crew will be about 20 people.

“No one is from L.A.,” said Lustgarten. “I’m trying to source it all locally.”

Lustgarten got his start in film during the indie film movements’ early days. “Taboo,” his early ’80s portrayal of a man obsessed with his teenage neighbor, won the Academy Awards 1983 top narrative prize for student film, beating out Spike Lee’s “Joe’s Bed Stuy Barbershop: We Cut Heads.”

He moved to L.A. and worked on the creative side of film making before switching over to the business side. He started LEO Films in the fall of 1991, which has developed 80 feature films.

An eclectic film roster reflects the company’s aim to provide a broad base for independently produced films no matter what their subject matter and audience. Some of the company’s 2009 releases include “Flesh Suitcase,” a film about drug mules; “Eye,” a cat-and-mouse thriller about a female judge who has discovered her daughter has been kidnapped; and “Space Zombies,” a genre film about the living dead from outer space who come to Earth in the form of a woman.

With “My Own Blood,” Lustgarten has gotten back into the creative side of filmmaking. It will be the sixth film he has written, directed and produced.

Even before filming has started on the film, Lustgarten said he hopes to stay in the area and produce more films.

“As long as we can make it work, we’ll do quite a bit of films,” said Lustgarten.


Copyright © 2009 - Southwest Iowa News
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Sunday, September 6, 2009

Financing

We are currently in prep, looking at crew and cast resumes for what's going to be a mid October start date of principal photography and a three week shoot.

On the financial side, we have $170,000 in place through in kind contributions, and are looking for $250,000 to complete the budget.

Investors can write off 100% of their motion picture investments this year under Section 181 of IRS rules. On top of the federal tax deduction our Iowa contracts provide a tax credit of $250,000, which after discounts (usually 15%)will be at least $210,000, or about $290,000 total for someone in the 35% tax bracket.

The company was recently profiled in both the World Herald and the Non Pareil.

Sunday, April 5, 2009

Iowa Tax Credit Contracts Received

We have received and signed our contracts from Iowa for our tax credits on the film My Own Blood.

Friday, February 27, 2009

Tax Incentives Cover Almost 100% of Budget

2009 is a most propitious time for film investment and production in the U.S. as there are multiple tax incentives available that can add up to nearly 100% of the total investment.

Under the TARP revision of the American Jobs Creation Act in 2008, film production is eligible for immediate deduction instead of capitalization on films made during 2009. Moreover, an Iowa film incentive additionally provides for transferable tax credits of 50% of money spent in the state on production, for which we've negotiated buyers at a discount rate of 85%. And on top of that we have been granted $170,000 of In Kind services credits on our first film that while probably not viable for federal tax deductions are able to be used for Iowa tax credits.

In response to this opportunity, I am putting together several film projects that will be submitted to Iowa. The first film has already received signed contracts with Iowa for its tax credits.

LEO Films in association with Wild Prairie Film Productions, inc. is producing a thriller entitled “My Own Blood” budgeted at $500,000 with a combination of cash and donated labor and equipment.
The Process

The production company for the shoot is an Iowa corporation, Wild Prairie Film Productions, Inc. and it has already received approval of script and budget by the state film commission.

An 18 day shooting schedule is planned for the Council Bluffs, Iowa area beginning in third quarter 2009 with post production lasting eight weeks. The crew and cast will consist of key and strategic members who the production company has worked with previously in Los Angeles, as well as local Omaha and Council Bluffs crew that will work under them in secondary positions, which will allow them to gain experience on a feature film from more experienced pros in the industry. The crew and some equipment vendors will be working at discounts from 50% to 100% of their usual day rates and thus under Iowa rules the 'deferred vendor credit can be counted as an expense and be eligible for tax credits.

For production equipment, we have available to us the new Red Camera, Sony Cine Alta High Definition cameras, and 35mm cameras at free to hugely reduced rates, which will allow for a very high quality master of the film on HD. We also have similar deals on our grip and lighting equipment.

For locations, most of what we require are existing apartments, houses, bars, offices, restaurants, which will be donated, but for one key location, the radio studio, we will build a set where we can shoot uninterrupted.

There are only a few key props in the film, and no special effects or such are required.


Sales Strategy


Completion of the film will be in the first quarter of 2010 with a trailer and other sales materials available for the American Film Market in Los Angeles in November where the film will be offered to international buyers. For the U.S. release, we will initially solicit interest from the studios and cable tv channels that show original films. After weighing the prospects of these outlets, we will determine whether to license the film or to distribute through LEO Films directly to retail accounts such as Blockbuster, Netflix, Hollywood Video, Amazon etc.


About the Producer/Director/Writer

LEO Films is owned by Omaha native, President, Steve Lustgarten, who in addition to running the company for the past 17 years has made the Academy Award winning film, American Taboo, and produced and or directed 6 feature films, including Power Slide, which was shot in Nebraska and Iowa. He has also worked for Hollywood legendary independent producer, Roger Corman, and co-produced with Oscar nominated, Steve Oedekerk (Ace Ventura, Patch Adams, Bruce Almighty, Evan Almighty, The Barnyard.)

He worked in commercial advertising in Omaha for Richard Holland’s company Holland, Dreves and Reilly. He has also worked as a film editor, post production supervisor and has attended dozens of world markets and festivals including MIFED, Cannes Film Festival, NATPE Tv market, American Film Market, Toronto, AFI, Sundance, Hong Kong Filmart, and the New York IFFM.

LEO Films Distribution


LEO Films, formed in 1991 as a means to distribute independent feature films to the U.S. and other markets has released over 75 features including film starring: Gillian Anderson (X Files) Matt LeBlanc(Friends) Andrew McCarthy, Lili Taylor, Tony LoBianco, Stacey Keach, Genevieve Bujold, Graham Greene, Jeri Ryan, Lou Rawls, Jon Favreau, Seth Green, Cheryl Lee, Henry Czerny, Charles “Roc” Dutton, Takeshi Kitano, Heather Graham, Yancey Butler, Richmond Arquette, Kim Wayans, Julie Benz (Dexter), C. Thomas Howell, Kim Darby, Melissa Leo, Tess Harper, Roddy Piper, Hill Harper, and others.

LEO Films has nearly a dozen completed new releases ready for 2009 including: Bigfoot, Fight Ring, LA Hit, Almost Invisible, American Taboo, Power Slide, The Cold Ones (C.Thomas Howell), Flesh Suitcase, Gorilla Wars 3-D, Scream Queen, Two Heads One Brain, Price of Greed and has signed a contract for Spin Cycle, starring Howie Mandel.


In conclusion, MY OWN BLOOD is a feature thriller set in a highly profitable genre that will be shot on high quality HD cameras on a low, but manageable budget by an experienced director and producer with Academy Award credit. Distribution is guaranteed through the production company’s own distribution system. The company seeks to make a series of films taking advantage of these strategies with budgets from under $1m to $10m.

For more information about LEO Films and the project:
www.leofilms.com
www.imdb.com (search -leo films/ distributor)
Steve Lustgarten, President – 323-459-5574
lustgar@pacbell.net

MY OWN BLOOD - outline


In the style and tradition of such thrillers like "Silence of the Lambs" and "Sliver", MY OWN BLOOD explores the psycho-sexual territory of sexual addiction and murder.

The story is set in an unnamed American city of the West and focuses on the life of a radio shrink, JOYCE, who is becoming well known for her insights into the troubled callers of the night. Although Joyce seems to be an attractive young woman who has her life together, her after hours prowling of bars and a non stop parade of anonymous men in her bed, leads us to believe otherwise.

Joyce's habit of loving and leaving in quick procession has raised the ire of one young man, TOM, who is not willing to take her dismissal so casually. He begins to bombard the radio station with messages for Joyce as well as following her on her rendezvous'.

Meanwhile police detective Lt. Macilsen "MAC" has his hands full with what is quickly beginning to look like a serial killer of women. When one of the victims is found to have been listening to the Talkline show, Mac investigates and realizes Joyce is a woman whom he had tried to pick up in a bar recently. Joyce, also recognizes Mac and is uneasy seeing him in this situation. Georgia mentions the messages from Tom to Mac, but Joyce dismisses any knowledge of the caller and Mac finally leaves with suspicions and interest in Joyce.

Joyce has more secrets than a string of men we discover one night, as she attends a meeting of 'birthmothers', women who have relinquished their children to adoptive parents and are now seeking to find them. Joyce had given up her daughter 20 years ago when she herself was only 15. Now the private agency she has hired to find her daughter has located the family she was given to and Joyce cannot decide whether to contact the girl or to leave her alone. Two of the meeting members MIRIAM and RICK stay up with Joyce and counsel her to go ahead and find the girl.

That night, as she is leaving alone in the dark, Tom attacks her and smashing her window almost gets into her car. He's scared away when Rick comes up to see what's going on. Rick wants Joyce to call the police, but she refuses and zooms off.

Mac and his partner STEVE are busy with the criminal investigation when they are surprised to hear a man confess to the murders they know of plus another they don't, on Joyce's radio show. The man calls himself ED.

When a new murder victim turns up the next day Mac plunges deeper into his questioning of Joyce and sets up tracing equipment at the radio station in case he calls in again.

But there's more to Mac's interest in Joyce than a murder investigation, as Steve begins to see. Mac is obsessed with this woman who is so unavailable on one hand, yet so easy on the other. He senses something much deeper going on in her and in himself.

As Mac questions the husband of the latest victim, Joyce is enroute to the small town where her daughter and adoptive family live. After several hours of waiting she finally works up the courage to ring the bell and finds something she had not expected. Her daughter, LISA, had run away a month ago after a fight with her mother and they don't know where she is.

Both Mac's and Joyce's investigations are coming up against a brick wall, as Mac's trace of a caller claiming to be the killer reveals a bunch of computer nerds playing games with a gadget that changes the pitch of one's voice over the telephone. But later that night another call comes in. Mac and Steve respond to it casually believing it to be another prank. This time it's for real. They find a human heart in the freezer with a message "for Joyce". Mac tries to find Joyce to warn her, but she's out somewhere.

Joyce, we find, is with Tom, who had kidnapped her from a convenience store parking lot and is taking her down to the river. Joyce escapes from Tom briefly and he chases her into a sewage culvert where in his anger he pulls out a knife and threatens to kill her. Before he can strike ,a figure darts out from the shadows and smashes Tom over the head with a whiskey bottle, knocking him out.

Joyce wakes up in the hospital after being treated for the minor injuries she received in her scuffle with Tom and is told by Mac that the person who saved her was Lisa, her daughter, who had been tailing her for two weeks videotaping her every move from a distance.

Joyce is finally face to face with the daughter she'd given up so long ago and they are both nervous, unsure of how to react, what to say or do. Lisa plays tough and disinterested, concealing her inner hurts and after a brief conversation leaves.

Mac tries to console Joyce, but she is beyond that. She explains to him that she didn't want to tell him about Tom for fear he would think he was the killer. She's surprised to hear that he's confessed to the murders and still doesn't quite believe the disturbed young man was capable of murder.

Steve, too, doesn't quite buy Tom as the killer, much to Mac's chagrin, who wants to believe they've got their man. But when the coroner remarks that all the women were childless yet all had given birth, Mac sees a new pattern emerging. Someone is killing these birthmothers.

After Tom kills himself in his cell and another victim turns up, Miriam, Joyce's friend and confidant, Mac begins to wonder if Lisa's following her mother wasn't more than just curiosity. He goes to question her and she escapes.

Joyce goes on the air to try to convince her daughter to call in and when she does to give herself up before she's shot by some overzealous patrolman. Lisa accuses her of setting her up and hangs up. Joyce is devastated.

An hour later at the radio station, Mac is still there when a call comes in from a Sheriff in a neighboring country that they've found a girl on a bus matching the description of Lisa right down to her jacket. Mac takes off to retrieve her, leaving Joyce behind with Steve.

In the final act, Lisa shows up for a confrontation with Joyce and tells her she didn't kill anyone. But before they can call the police the real killer shows up trapping them in the building with the phone lines cut. It's a tense cat and mouse finale with mother and daughter having to pull together to save themselves from a deranged killer who thinks Joyce is his mother.

The story is an exciting drama packed with erotic tension and suspense that goes beyond the usual thriller in its inner depiction of the wounded souls of these characters.