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Hi XXXXXXX,

Okay thanks for the clarification.

1) 2) The Section 181 does generally apply to film production only. This is an effort to keep film makers from leaving the country to produce films that are not subject to harsher IRS guidelines. If you are familiar with Section 179 property, this allows a taxpayer, say a small business, to actually claim the entire amount of a particular capital expenditure in one year, rather than capitalize the asset and depreciate it over it's estimated useful life. Section 180 works similarly, except the amounts expensed in one year are far greater. No election is needed, that election is made just by using Section 181.

2) Your overhead, such as rent, salaries, utilities, all your business expenses would be reported on form 1065. the net income/loss is them distributed to the partners by way of a K-1 form for use in preparing their individual taxes. The accounting fees wold be listed as an expense most likely called "professional fees" on the Partnership return (1065) This is not a return that is taxed, it is called an information return.

3) Disregarded.

4) Here is the general rule regarding income forecasting method:
You generally must file Form 8866 to figure interest under the look-back does not apply for any property that had an unadjusted basis (total capitalized cost) of $100,000 or less the end of the recomputation year.

You may find more information here

5) Form 4562 is used in conjunction with form 8866 if the circumstances circumvent. It will make much more sense once you review the form 8866 in the link above. If you still need help, just ask.. I'm here.

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Mike