I already answered that. Because the value of doing so is greater than $10 million. Hence, the value of the movie is NOT $0, even when it is deleted they still retain the exclusive rights and that has value. So to say the value is $0 is a lie. When the movie studio claims “Oh boo hoo our movie is worth $0 we need to write it all off” They are lying and the IRS should call it for the bullshit it is and make them take a smaller reduction for the expenses minus the residual value of the movie.

I think you fundamentally misunderstand what's being written down to zero. The movie is being written down to zero, not all of these extended rights and IP you're talking about.

That's how a company can lose more money on a $10 million sale then deleting it. If you have to include more than $10 worth of IP or obligations with the sale is a negative return. Alternatively, selling a movie could cost you more than $10 million in losses on a different movie.

These are all legitimate reasons to destroy instead of sell it. Avoiding costs are fundamentally different than increased Revenue for the purpose of taxes, even if they're monetary value is the same. Cost avoidance is not taxable value creation.

I can save $20 in laundry fees by not shitting in my bed, but I don't pay taxes on the value I saved. This is for two reasons. First, I'm no richer off after not shitting in my bed then I was before. Second, the alternative is I would have to pay taxes on every second of every day I chose not to shit in my bed.

I don't think that any retained rights are being valued at zero, besides the distribution rights to a a movie that doesn't exist.

If they keep the rights to develop a script, for example, that would have some tiny residual value.

They’re not avoiding any costs by selling the movie. They would just have a smaller loss than if they didn’t sell it. They don’t have to sell the entire rights to the underlying IP, just the one movie. Nobody is taxing anyone for avoiding losses.

You clearly have some kind of philosophical objection to taxes in general and a very confused notion that companies are allowed to just deduct anything they want without any restrictions and that is not how this works in the slightest.

This isn’t complicated. If you make a movie and release it and nobody goes to see, ok you lost money, write it off. If you make a movie and it’s not working out and you sell the rights to someone else to cut your losses, ok you lost money, write it off. If you make a movie and then you’re like “jk lol I just want tax deductionz plz.” No, screw you. You’re just playing games with the tax system instead of making movies, so fuck off.