BUT it still isn't AT ALL good business sense for a label to have tax write-offs, because they ACTUALLY HAVE TO SPEND THAT MONEY EVERY YEAR to write it off every year. so it's a way to minimize their losses, but they still LOST that $50,000 that they no longer have to pay $5-10,000 in taxes for.
where it ACTUALLY works is when they AREN'T actually paying for these studio costs, promo, expenses, etc, -- they'll trade within their own businesses: rent their own studio BUT THEN STILL CHARGE IT OFFICIALLY at say $2,000 an hour, but off the record no money changed hands. & Then they'll still charge that same fake $2,000 to the artist & run up a debt on them. Then if the artist ever somehow manages to blow up eventually, then all them fake expenses still GETS RE-COUPED OUT THE ARTISTS BUDGET & ROYALTIES!
Meanwhile, even if they never blow, the Label gets to not pay taxes on money that they didn't actually lose.
But that's STILL not that great a look, cuz they still gotta pay the Engineers & make sure that the studio is making $$$$. Or pay their marketing department (unless they're interns!), etc. So, if they reaallll shady then they can write-off shyt that never happened AT ALL. Shelf the artist entirely, stop spending any money, but for Tax purposes keep writing off fake expenses. Keep em under contract for that, & the fear that maybe they'd pull a 50 Cent & blow up elsewhere & make them look dumb...
OR, if they're really actually just weedcarriers for their boy that's a legit star, then the star might be fine with continuously cashing their wack-rappin ass buddies out, just to keep em around & employed. They were getting cashed out anyways, so that makes business sense to pretend they rap too, & be able to claim it as tax write-offs.
Meanwhile u give the impression that ur a boss... A win/win 
makes cents.
Wont ask u how
