Almighty Jay explains a resourceful way to fund a recording session without coming out of pocket when signed to a record label.
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Marvelously done, young man. 
I don't understand enough about the music business to know if this is a good or bad thing.....
Right potential sales. Maybe he's investing the advance money while saving on the recording processthe payback is after the record sells
he gets money upfront
He should have never opened up his mouth!!
The $500,000 is a loan given to him to complete his project.
It HAS to be repaid. If he uses the money to complete the project there are no taxes.
He just ADMITED to paying HIMSELF with the loan money.
If the IRS sees these, he has to pay taxes.
The $500,000 needs to be repaid no matter what.
This isn't a flex and he needs to keep his mouth shut.
The $500,000 is a loan given to him to complete his project.
It HAS to be repaid. If he uses the money to complete the project there are no taxes.
He just ADMITED to paying HIMSELF with the loan money.
If the IRS sees these, he has to pay taxes.
The $500,000 needs to be repaid no matter what.
This isn't a flex and he needs to keep his mouth shut.
The record company paid a studio on his behalf which is what they do. It just happened to be a studio company he created. The record company was going to pay a studio on his behalf no matter what so why not his studio? If he went to a different studio to record he would have to pay the record company back. In his own studio it's no different he will have to pay the record company back. But he will just get to keep the money his recording company earned in the process. I don't see the problem. Idk
Bro. I am not asking you. I am telling you. I listened to what he said and if he did what he said he did, then he had the label pay his studio. Which is a billable invoice. Which creates a taxable situation.
He took the loan money and billed himself. Just like if he billed ABC studio.
ABC studio has to pay taxes on that money because to them it is income!!!
How is that smart for Jay? He is paying taxes on money that is a loan to him!!
Now he is paying the loan back AND taxes!!!!
How did he benefit?
Good for him, but people been running this play for years.
lol. No they haven’t.
They have been producing for free bc they own the studio. The invoice should be zero.
He said he billed it. He created a taxable situation.
If they gave him a 500,000 loan to produce his album, it would be smarter to return the studio costs of the loan.
I hope that is what he did.
Huh?? This doesn’t make sense
How does one produce for free??
We own 2 commercial studios fam. This is standard practice. Producers don’t care about recoup’n. That’s the Artist’s problem.
Exactly
He is paying the studio cost back and taxes on income from this studio. No matter what if he had gone to someone else studio he would be paying the studio cost back so the loan is the loan they recoup everything. This way he is paid up front to his company even tho he has to pay taxes which again is just taxes on the income he made. If the taxes were magical more then the income I could see you point. But he still made taxed income and he still has to pay the label back. Now I don't know if the label would approve of him just making his album at his crib and returning the studio cost that could be doing the studio a favor. His way Album flops studio can't recoup he still has the income from his business. Your way album flops studio doesn't have as much they have to recoup well write-off to the label he has nothing.
Correct. How is he benefitting?
If he has his own studio and can do it all in house, he should not use the whole $500,000 so there is less to recoup.
But why pay taxes? Do it all for free.
Only way to benefit is HIS FAMILY owned the studio and he paid them, then you are hooking up family.
You were going to use a studio anyway so might as well hook up your little brother with some bread.
I am saying if Jay produces his own songs.
If he doesn't then ignore me.
I don't know who "we" is. I ain't talking about them.
Took me back with this
Studio equipment are expenses. As a business owner, what can you do with expenses?
That rule is record company people are Shadeeeeeeeeeeeeeeey
I was thinking that, at that point, mortgage and upkeep on the home become deductions don't they? Also, when it comes to the payback, can't he throw that money in an account and make money off that money and pay them back their money when it's due?
Now you have him paying capital gains tax on the invested money..lol
To quickly answer your questions. Yes.
But why would you do that when you don't have to?
There is no need to make it taxable.
The loan is the best tax advantage.
He can pay taxes on tour money and appearances.
You can write it off to make your taxable income less.
Why would you do that when you weren't paying taxes on that money to begin with?
The truth his Jay probably isn't paying taxes. He needs to keep his mouth shut.
That is my original point.
I didn't wanna say that. But...