New Mexico Media Partners, LLC (“NM MP”) is a $25 million operating company to be run by Luminaria, LLC with the objective of generating long-term capital appreciation. By producing a diversified portfolio of at least five high quality, low to moderately budgeted films, NM MP intends to meet the market demand for such product and be positioned to structure distribution through various available channels with the objective of minimizing financial risk while preserving financial upside.
NM MP intends that all motion pictures it produces will qualify for recent favorable changes to the federal tax treatment of investments in films budgeted $15 million and below. These incentives include current federal tax regulations that enable the owners of qualified film productions to deduct 100% of development and production costs in the year incurred against passive income (or carry forward losses to be deducted in the future against ordinary income), while income from a sale of the project remains eligible for taxation at long-term capital gain rates. Owners of qualified films are also entitled to exclude a percentage of net income.
NM MP will produce all of its projects in New Mexico, thereby taking advantage of the State of New Mexico's significant media production incentives. New Mexico, as an inducement to attract media production jobs and related revenues, returns to producers a 25% cash rebate on all expenses subject to New Mexico income or gross receipts tax and gives producers the option of fully leveraging the production cost of any project, up to $15 million, with an interest free loan from the state. Investors in NM MP will have the option of making their investment in cash, or in cash and financial guarantees that will be used to secure interest-free loans offered through the State of New Mexico incentive program.
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