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Info You Can Use: When Is Your Arts Career Not A Hobby?

There was a very interesting article on the Forbes website which explored the point at which the IRS determines your arts career is actually a job and not a hobby.

Since you can deduct job related expenses to a greater degree than hobby related expenses, the distinction is rather important to an artist.

And while a taxpayer may deduct expenses of a trade or business in excess of the profit earned by the business, thus generating a net loss, a hobby may only deduct its expenses to the extent of the profits of the activity; in other words, the hobby cannot generate a net loss.

The article author Tony Nitti, lists the 9 point test that the IRS uses the make the distinction. In the article he discusses a specific case where the IRS was challenging the filing of an artist and provides examples of how each question of the test would be applied in this case.

Later, he talks about how this particular artist’s career met the criteria of each of the test questions.

Something I found notable was that usually in these cases, a person has a steady job and then engages in a side activity which they subsidize with the income from their regular job.

In this artist’s case, she was an artist for about 20 years before she was hired on to the faculty of a college. The IRS was suggesting that her artistic career which preceded the steady job was the hobby.

This is one of the reasons I feel the article is valuable. For a great many practicing artists, this will be the path their career takes. It is only when they have proven their worth after some period of activity that they may be offered work on a consistent basis.

Now I should note, as Nitti does, that the reason the IRS was looking at this artist was because of the types of things she was claiming are expenses. That issue still has to be resolved in a separate hearing. Most artists probably shouldn’t worry about being targeted by the IRS.

The hearing about whether her artistic career was a career or a hobby has been completed. Nitti’s discussion about why her activities met the criteria is an important read. Even though this case addresses the career of a visual artist, it doesn’t take much effort to see how it applies to other disciplines.

Basically, if you keep adequate records, educate yourself about the market, consult with market experts, price your work to make a profit and have an expectation that work you are currently doing (which I suspect would apply to rehearsing and practicing) will eventually make a profit, then you might have a career as an artist!

Obviously it isn’t as simple as that summary so read the article.

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Info You Can Use: Take A Look At The Broadway Books

Though I don’t cite him very often, I keep an eye on the blog of Broadway producer Ken Davenport because he tends to ask questions about how Broadway can do a better job of serving the public.

We often see Broadway as a monolithic behemoth to whose gravitational pull most theaters are subject to some degree. It is interesting to see someone talking about how the business process in NYC might not be living up to its potential and gain insight into some of the inner workings.

In the next two weeks Davenport is going to conduct webinars breaking down the budgets of a Broadway show. These will be held on October 22 and 29, both from 7-8 pm EDT with a recording posted afterward. (my emphasis)

Over those two nights, I’ll walk you through my philosophies of budgeting, a strategy to make sure you come in under budget on every single one of your shows, and most importantly I will walk you through each and every line and page of an actual Broadway budget.

In other words, if a budget is the engine of a Broadway show, I’m going to pop the hood, take apart the motor piece by piece, and then put it back together again . . . so you not only understand how it works, but so you can build your own.

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It’s going to be fun, and if you’re a numbers guy/gal, you’ll really love it. If you’re not a numbers guy/gal, well, all the more reason for you to sign up, because budgeting is where so many shows go wrong. It is the business blueprint of your production.

I emphasize this second to last sentence because even if you never think you will ever mount a Broadway show, this is an opportunity to have someone talk about a budgeting process for a performance.

For everyone who talks about transitioning away from the non-profit arts business model, this is a good opportunity to gain insight into what factors you need to consider in the commercial realm, even if you are already pondering a third (or fifth) alternative.

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Info You Can Use: Change That Contract!


I thought I would talk a little about performance contracts today. It may not have been in relation to performance contracts, but I recently read that many people are under the impression that when they receive a contract they either meet the conditions or no deal is possible.

This may be true for the terms of service presented with every computer app and service out there, but isn’t necessarily so in a great many areas of life.

The reality is that contracts for performances are often a lot like dating. There are non-negotiable conditions and then there is a lot of aspirational conditions reflecting an ideal scenario. Knowing which is which is a matter of experience, but you won’t get that experience until you start to ask.

For example, when we do Broadway shows, there are certain stage dimensions that the tour requires. Most of the time, we are pretty close, but if we aren’t we can still do the show. It is just that the production makes a decision about what set pieces will remain on the truck.

Similarly, nearly every Broadway show technical rider we receive asks for a 36 foot tall Genie lift and 2 sets of washers and dryers. We have a lift that can reach 19 feet and only one washer and dryer set. No one has ever balked about doing the show based on that.

There are some stages which will be too small to accommodate a show or lack sufficient equipment, but productions know that every venue is different and will undertake all sorts of contortions to make the show happen.

On the other hand, if they say you have to have 50 people with various qualifications onsite at 8:00 am to help unload and set up the stage, they mean it. They will either fine you for not having enough stagehands or stop constructing the set until enough people are present–often both.

These guys left a venue at 2 am the night before and arrived on your doorstep at 8 am and tonight they will be leaving at 2 am to start it all over again. They have little tolerance for situations which will make their job harder or more hazardous.

In terms of the legal content of the contract where it talks about liability, force majeure obligations and indemnifications, you might feel a little intimidated by the formality of the language and feel you have little recourse but to accept.

In fact, this is the place where you should be looking very closely to make sure you are not placed at a severe disadvantage. Most force majeure clauses I have seen are reasonable and equitable in acknowledging the impact of severe weather and other unavoidable emergencies. Then there are some where you could have a meteor smash into your building and you would have to make payment in full plus an additional inconvenience fee.

Be careful about taking a claim of “industry standard clause” at face value.  Ask colleagues or post a question on a discussion forum if you are uncertain or confused about a section of a contract.

However, there are people working at standardizing performance contracts. The Broadway League has created a form booking contract that now seems to accompany every tour of a Broadway show we present.

Given that these contracts are among the longest I deal with, having nine pages which is the same from show to show is a great boon. You make your changes, save it and send it along with every new show. Then you are only left with combing through four-five show specific pages and 15-20 pages of the tech rider. That may seem like a lot of work still remaining, but the nine pages of the form booking agreement tend to have most of the complicated legal language.

Don’t get overly worried if your changes to a contract make it look like a rainbow spiderweb of insertions, deletions, reversals and counter signatures. It is not uncommon for a contract to look something like the below.

contract capture

This is just a visual example of what a marked up contract might look like only. Most of the change notation placements make little logical or legal sense. I applied them very loosely and even obscured other parts of the contract. These are just examples of the type of notations that commonly appear on a contract and how crowded it might appear with deletions, additions and alternative language proposals.

The STET by the way means to reverse the change. It is often used to indicate that a person doesn’t agree with the change in its entirety and wants it restored to its previous state. (Which, it should be noted, may not necessarily be its original state.)

Every change that is made should be initialed and dated by both parties before either signs off on the contract. It is also wise to keep a clean copy of the original document and save each version of the contract as a separate file. I strongly suggest springing for Adobe Acrobat so you can edit PDF documents electronically and easily reverse them. Otherwise you will go crazy trying to replicate all the changes for every iteration.

Of course, there is no guarantee that your changes will be accepted. You should just feel you have an ability to negotiate reasonable conditions.

While this entry is only meant to address a small segment of contracting and to do so from the presenter point of view, I was considering using this as a basis for an entry for Drew McManus’ ArtsHacker project.

With that in mind, I would be interested in knowing what other information would make this or a related entry useful to a reader. What questions might you have?

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Same Old Library Building, Different Content

CityLab had an article on the changing role of libraries in communities which was based on a longer piece about the Columbus (OH) Metropolitan Library (CML).

As I have mentioned before, I frequent my local library so often that the staff anticipates my needs (or they are stalking me) so I am a big fan of the institutions already.

What caught my attention was the informal survey the Columbus library did asking people on Facebook “to share five words describing their childhood libraries and five words describing how they imagine libraries two decades from now.”

The word clouds that resulted from this survey appear in both articles. While books, reading, information, research and learning figure heavily in the childhood word cloud, community, technology, information, entertainment, access and meeting emerge for the libraries of the future. While some of the childhood words lose their prominence in the vision of 20 years hence, their weight is still on par with strongest future concepts.

The Facebook survey CML used seems like an interesting exercise to engage in for trying to discern how your community sees their relationship with your organization changing. Paper or in person surveying might be required if you don’t have the 36,000 Facebook likes and 800,000 card carrying members that CML has.

The CityLab article uses CML’s results to complement a report released by the Aspen Institute Dialogue on Public Libraries. Among the findings that CityLab emphasizes are:

People: The library must “shift away from building collections to building human capital.” This not only refers to the users of the public library but also its librarians, who will act as curators of the library’s content.

Place: The public library of the future is both a physical and virtual place. While the latter gets emphasized—perhaps overly so—in discussions about the future, the physical structure of the public library will remain vital to its community. But its purpose will change: “The physical library will become less about citizens checking out books and more about citizens engaging in the business of making their personal and civic identities.”

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Platform: America’s public libraries should become community learning platforms. They should serve as a jumping-off point for users to create, learn, and innovate…

If this language about staff acting as curators; the role of space and how it is used; and providing a jumping-off point for creativity, innovation and learning sounds familiar, it is probably because the same concepts have been bubbling around conversations in relation to the arts.

So it may bear paying attention to what libraries are doing these days and consider whether it is worth partnering closely with them to reach common goals.

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