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In order to qualify for the higher ($20 million) deduction, what does it mean to require that a significant amount of the expenditures be incurred in an eligible area?

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In order to qualify for the higher ($20 million) deduction, what does it mean to require that a significant amount of the expenditures be incurred in an eligible area?

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The IRS temporary regulations outlined two alternative tests to determine if the significantly occurred requirement is met. One test is based upon production costs and establishes a 20% threshold for the test. It compares production costs incurred in first-unit principal photography that takes place in a designated area to all productions costs incurred in first-unit principal photography. This does not include preproduction, editing and post-production costs. The second test is based upon the number of days of principal photography. If at least 50% of the total days of principal photography take place in the designated area, the production will be deemed to satisfy the significantly occurred test.

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