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Band expenses

#42
jive1 said:
I know if it were your band, and you were making the money, you could deduct the expenses and depreciation. Not sure how it works out when someone else pays expenses towards another person's profit. I'm curious as to how this would work tax-wise.
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Also, I would think you'd need some kind of other documentation and/or record-keeping going on to take these as business deductions. I know when way back when my old band was dealing with the business side of producing CD's, and serious gig money, we formed a limited partnership, got a tax ID number and the rest of that. We even had our horn section and/or any sit ins listed as sub-contractors.
 
#44
vqlt said:
the band was established a few years ago. They were auditioning new bass players and my son was offered the position. ( no pay as the band generates little revenue) in the past the band shared expenses equally and they want to continue that arrangement. the band manager who is the singers mom provided a spreadsheet of expected expenses for 2014 based on past expenses. I will be asking for receipts for tax purposes if applicable. expenses include $3600 for EP, $3500 for video shoot, etc. I'm hoping for these prices we are talking professional services. My son has been in other bands with typical expenses such as banners, business cards, etc. I guess I was caught off guard by the cost of stepping up to the "major leagues" (well not quite yet). I guess if the band is serious about reaching the next level the cost involved are part of the process. He does have an entertainment permit do we need to form an LLC or similar for tax purposes? I know the band manager deducts expenses related to the band so it seems like band members should be able to do the same
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It sounds to me like the mom of the singer has set up a sweet deal where she is running a business for her sun, and using your son and the rest of the boys in the band as "free labor" and getting free capitol to invest in her little business from the parents of the other boys.

If so, you know she is writing all this stuff off of her taxes. Where is your son's 1099 form? Where is his pay? And if he is not getting paid, and he is working (for free) in what amounts to a start up business does he get equity in the business? Does he have that in writing? How is the song publishing handled? Who is keeping all the money? If the band plays a gig that doesn't pay in cash, who is taking the tax hit on that check?

Why are you investing money into a business that makes no revenue? I hope it's because you believe that your investment will be returned, and if that's the case, I hope you have that all set up in writing before handing over any money.

If you are looking to personally invest (let's say) $1,500 in 2014 and (let's say) $1,500 in 2015, it might be worth your time and money to go see and spend a couple hundred on an entertainment lawyer. May seem silly for a high school band,, but a $3500 music video and a $3600 EP also seem silly for a high school band. Places like this are great for free advice, but you get what you pay for, ya know.

If that Mom gets to make all the decisions and you just hand over the money, then you sir are a sucker -- not to be mean, but it's the truth. Unless you have that kind of money laying around (which you might) and you just want to give your son an awesome experience. Then go for it. There is also a great opportunity here to teach your son some basic business skilz!
 
#45
punkjazzben said:
Key difference being that wedding bands make money, and this band doesn't.
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True this. When I actually did weddings, my band was cheap at 1500-3000$ (plus rooms for trave gigs). We'd get 350-500 in a club setting. On an occasional weekend when we'd do a wedding and/or a few club gigs, We could clear 4$ in a couple days.

If you're making that kind of cash, you can spend that much on a good video.
 
#46
hennessybass said:
It sounds to me like the mom of the singer has set up a sweet deal where she is running a business for her sun, and using your son and the rest of the boys in the band as "free labor" and getting free capitol to invest in her little business from the parents of the other boys.

If so, you know she is writing all this stuff off of her taxes. Where is your son's 1099 form? Where is his pay? And if he is not getting paid, and he is working (for free) in what amounts to a start up business does he get equity in the business? Does he have that in writing? How is the song publishing handled? Who is keeping all the money? If the band plays a gig that doesn't pay in cash, who is taking the tax hit on that check?

Why are you investing money into a business that makes no revenue? I hope it's because you believe that your investment will be returned, and if that's the case, I hope you have that all set up in writing before handing over any money.

If you are looking to personally invest (let's say) $1,500 in 2014 and (let's say) $1,500 in 2015, it might be worth your time and money to go see and spend a couple hundred on an entertainment lawyer. May seem silly for a high school band,, but a $3500 music video and a $3600 EP also seem silly for a high school band. Places like this are great for free advice, but you get what you pay for, ya know.

If that Mom gets to make all the decisions and you just hand over the money, then you sir are a sucker -- not to be mean, but it's the truth. Unless you have that kind of money laying around (which you might) and you just want to give your son an awesome experience. Then go for it. There is also a great opportunity here to teach your son some basic business skilz!
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At the very least its worth having an accountant or lawyer look into things. If you're ponying up decent money, I'd want some kind of documentation of what the business situation is. Especially since the cash seems to flow in only one direction.
 
#47
Do what you can to get your son publishing rights. If he is writing for the group,it might not be a losing proposition. Also, they should have a business agreement - is it an LLC? An s corp or sol prop? If he isn't earning a check, he gets no tax break. If you are a part owner then you can deduct- you might actually make a nickel if the material can be sold and garner royalties. I've had shot tracks make me money on placements in video games and films, of you're going into the business. Go into the business
 
#48
is there an ad before the youtube videos start? If so, then revenue is being generated. If not, then the band is actually losing money that could be made from ads. I dont know what a professional video shoot costs, but I know that a cd can be recorded for MUCH less. Have the kids in the band ask around, someone has to know someone. Besides, taking kids who have never recorded in a studio before to a real studio is nothing but a waste of money- you're spending a ton of dough for them to learn the recording process, and about half the time figure out that they can't do whats expected of them. You end up with a half-butt or half-finished recording, both of which are a waste of money. There are studios that allow you to pay PER SONG instead of per hour. Much better deal for kids learning the ropes.

At the very VERY least you need a contract before that kind of money is spent. Who is paying in, how much, where is it going (i.e. what studio and who is making the video) and what happens with any profit. I'm with the others, if you're serious about this then lawyer up.

A lot of times things can sound really "awesome" and have a lot of "potential" but if potential and networking paid i'd be a millionaire. Instead, I now play for fun and am finishing my nursing degree.

Like Burning Skies, I was in a band on a decent size label that was pretty reputable in its day (Victory Records) but made pretty much nothing from them. We could book in almost any town, sight unseen, and draw 100-200 kids on the right show with a decent guarantee, even had a label in Belgium that had the band tour parts of Europe a few times. In the end we had a lot of fun but never really went anywhere.

It's really easy to get sucked into dreams like this but you have to be careful. I never spent any money I didn't mind never getting back.
 
#50
runmikeyrun said:
is there an ad before the youtube videos start? If so, then revenue is being generated. If not, then the band is actually losing money that could be made from ads. I dont know what a professional video shoot costs, but I know that a cd can be recorded for MUCH less. Have the kids in the band ask around, someone has to know someone. Besides, taking kids who have never recorded in a studio before to a real studio is nothing but a waste of money- you're spending a ton of dough for them to learn the recording process, and about half the time figure out that they can't do whats expected of them. You end up with a half-butt or half-finished recording, both of which are a waste of money. There are studios that allow you to pay PER SONG instead of per hour. Much better deal for kids learning the ropes.

At the very VERY least you need a contract before that kind of money is spent. Who is paying in, how much, where is it going (i.e. what studio and who is making the video) and what happens with any profit. I'm with the others, if you're serious about this then lawyer up.

A lot of times things can sound really "awesome" and have a lot of "potential" but if potential and networking paid i'd be a millionaire. Instead, I now play for fun and am finishing my nursing degree.

Like Burning Skies, I was in a band on a decent size label that was pretty reputable in its day (Victory Records) but made pretty much nothing from them. We could book in almost any town, sight unseen, and draw 100-200 kids on the right show with a decent guarantee, even had a label in Belgium that had the band tour parts of Europe a few times. In the end we had a lot of fun but never really went anywhere.

It's really easy to get sucked into dreams like this but you have to be careful. I never spent any money I didn't mind never getting back.
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Which band? I used to deal with Tony from time to time as I was the buyer for an indie record store too...did a lot of hardcore. I also did a lot with Revelation and of course Dischord and a number of other labels and distros.
 
#51
jive1 said:
I know if it were your band, and you were making the money, you could deduct the expenses and depreciation. Not sure how it works out when someone else pays expenses towards another person's profit. I'm curious as to how this would work tax-wise.

Personally, I wouldn't put a dime into something like that unless I had legal ownership in the project. I'd much rather take risks and invest in something that is something that I own, than something that belongs to someone else. Otherwise, I'd be taking losses for someone else's profit. If it were me, I'd approach the manager/mom/owner of the band to talk about sharing ownership for the share of costs. It may cause her to realize what she's asking of you, and rethink things. If she balks, you'll know where you stand and how she'll probably approach future business decisions.
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+1 Jive knows whats up.
 
#53
RustyAxe said:
I think the OP is being taken ... to bankroll the crazy dreams of the manager/mom. Her daughter isn't going anywhere without a band, and she can't or won't spend money to build one. IF the daughter gets a contract it's almost a sure thing the label has session musicians and the band get left behind. That's the norm.

At 16 there's only one thing that's important ... chops ... ie, knowledge of music and their instruments. IMO, if you really want to further the kid in his pursuit, get him the best instruction you can afford. Send him to a music camp. Get him involved in his school's music program (assuming they have one).
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I couldn't have said it better myself.

The "band managed by singer's mom" is a well known scam, whether she's doing it to promote her kid's career, or has delusions of stardom. In addition to the band eventually getting left behind, the band members have to put up with a helicopter parent controlling everything.

Splitting the band's costs 4 ways makes it seem like not a lot of money, but it means that Mom has little incentive to economize on costs, and you can be sure that there will be more costs. You're basically giving her a 75% discount on everything she wants.

Granted, my parents spent more than the amount being discussed here, on my musical education. But they were paying for things that were directly beneficial to me, such as lessons from a professional teacher.

There's no law against making a counter offer. Personally, I would offer to participate in the recording and video work for a flat rate, while assigning band full rights to the resulting product. Sharing ownership is great if there's anything worth owning. I'd be betting against that happening.
 
#55
fdeck said:
I couldn't have said it better myself.

The "band managed by singer's mom" is a well known scam, whether she's doing it to promote her kid's career, or has delusions of stardom. In addition to the band eventually getting left behind, the band members have to put up with a helicopter parent controlling everything.

Splitting the band's costs 4 ways makes it seem like not a lot of money, but it means that Mom has little incentive to economize on costs, and you can be sure that there will be more costs. You're basically giving her a 75% discount on everything she wants.

Granted, my parents spent more than the amount being discussed here, on my musical education. But they were paying for things that were directly beneficial to me, such as lessons from a professional teacher.

There's no law against making a counter offer. Personally, I would offer to participate in the recording and video work for a flat rate, while assigning band full rights to the resulting product. Sharing ownership is great if there's anything worth owning. I'd be betting against that happening.
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Agreed. Its a vanity project for the mother/daughter. If it ends up floating, you're still left holding the bag for these expenses. I'd tell her you want a contract and see how that shakes the situation up. ;)

YouTube views don't mean anything in any meaningful way. Its not gigs, its not label interest. Its not garnering income for anyone.
 
#57
vqlt said:
My son just joined a band and we are now learning of the expenses
(Video, photo shoot, EP, etc.)
What are considered reasonable for expenses and can any be tax deductible?
Thanks
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Tell your son to get a really good paying day job to pay for his musician habit.

I have come to realize that I will never break even in the music business.

Also if your son wants to make a million dollars in the music business then start with 2 million.

As per tax deductions ask a good tax consultant.
 
#58
I think you need to approach this like any investment....

Musicians are flighty. Teenagers are flighty. Combine the two, and you have enough potential material for a reality show, soap opera, sitcom, and pro wrestling plot. Do you really want to invest in that as the core of your business?

Also consider what other opportunity costs are involved. Your share of $7100+ could buy your son a nice rig, a years worth of lessons, his own promo materials, etc. which may parlay themselves into a gig that's profitable for him, as well as facilitating his development.

I also don't think that you're fully exploiting what the teenagers have. As adults, we have money and knowledge. But the kids have more time, energy, and friends. They should use that to attain knowledge and resources. You can do so much DIY now a days that it would be a shame to not let them mess around while they have the time and energy to do it. It's not like they have kids to support or a mortgage to pay, so let them work on it. Rather than spending $3K on a video, why not spend a few hundred on some video cameras and free editing software and let them play around with it? Instead of $3K on an EP, how about a few hundred on microphones and an interface and let them learn the process? Instead of spending a bundle on photos, they could find a friend at school who is a budding photographer to help. You never know, they may actually have more fun doing it that way. And in the end, they'll learn another valuable skill that they could use even if they quit music. And because they put more effort into it, they may appreciate it more. I never had parents involved in bands, and it made me more resourceful and knowledgeable because of that. Kids have time and energy, and they should fully exploit that. Time and energy help compensate for mistakes, and mistakes are a part of learning.

At that age, it's all about learning. IMO, there's no better time for learning than your teens/early adulthood. It's where opportunity, energy, and available time intersect the most often.
 
#59
jive1 said:
I think you need to approach this like any investment....

Musicians are flighty. Teenagers are flighty. Combine the two, and you have enough potential material for a reality show, soap opera, sitcom, and pro wrestling plot. Do you really want to invest in that as the core of your business?

Also consider what other opportunity costs are involved. Your share of $7100+ could buy your son a nice rig, a years worth of lessons, his own promo materials, etc. which may parlay themselves into a gig that's profitable for him, as well as facilitating his development.

I also don't think that you're fully exploiting what the teenagers have. As adults, we have money and knowledge. But the kids have more time, energy, and friends. They should use that to attain knowledge and resources. You can do so much DIY now a days that it would be a shame to not let them mess around while they have the time and energy to do it. It's not like they have kids to support or a mortgage to pay, so let them work on it. Rather than spending $3K on a video, why not spend a few hundred on some video cameras and free editing software and let them play around with it? Instead of $3K on an EP, how about a few hundred on microphones and an interface and let them learn the process? Instead of spending a bundle on photos, they could find a friend at school who is a budding photographer to help. You never know, they may actually have more fun doing it that way. And in the end, they'll learn another valuable skill that they could use even if they quit music. And because they put more effort into it, they may appreciate it more. I never had parents involved in bands, and it made me more resourceful and knowledgeable because of that. Kids have time and energy, and they should fully exploit that. Time and energy help compensate for mistakes, and mistakes are a part of learning.

At that age, it's all about learning. IMO, there's no better time for learning than your teens/early adulthood. It's where opportunity, energy, and available time intersect the most often.
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Dude, that is a FANTASTIC post, and this guy should totally listen to you, and even get involved, if he wants.
 
#60
Sounds like BS. A zoom cam and a tripod is all you need for YouTube. It's really all you need for most purposes. If they are really that good people should be willing to pay to have a piece of the action. A demo can be made on gear that costs very little and still sound great. They should use any band funds for promotion, merch, and any PA rental fees. A parent as a manager doesn't sound professional to me. Perhaps the band funds should be spent on hiring a professional talent rep/manager.
 

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