Fed income tax

A 10 persons partnership creates a movie with 5 million loan from a distributor. The agreement was to repay back the loan and interest in 4 years. The agreement also includes the distrubution agreement where the partnership pays 8% of the gross receipt (2% of it will be applied against the loan) to the distributor. 6 months into the completion of the movie, a studio proposes to buy the movie for cash plus repayment of the loan. THe partnership terminates the distribution agreement by agreeming to pay 10% of the received cash to the distribution (in addition to the repayment of the loan by the studio) Out of 5 milion loan, the partnership capitalized 3.5 mil as the direct cost of making the movie and deducted 1.5 mil as the ordinary business expense (mostly salary cost for employees other than the ten partners). How should the pro rated purchase price of the movie to each partner be treated for income tax purpose? - Is this your question? Add additional information