phase
(2) Production (A) In general A production is described in this paragraph if such production is a live staged production of a play (with or without music) which is derived from a written book or script and is produced or presented by a taxable entity in any venue which has an audience capacity of not more than 3,000 or a series of venues the majority of which have an audience capacity of not more than 3,000. (B) Touring companies, etc. In the case of multiple live staged productions— (i) for which the election under this section would be allowable to the same taxpayer, and (ii) which are— (I) separate phases of a production, or (II) separate simultaneous stagings of the same production in different geographical locations (not including multiple performance locations of any one touring production), each such live staged production shall be treated as a separate production. (C) Phase For purposes of subparagraph (B), the term “phase” with respect to any qualified live theatrical production refers to each of the following, but only if each of the following is treated by the taxpayer as a separate activity for all purposes of this title: (i) The initial staging of a live theatrical production. (ii) Subsequent additional stagings or touring of such production which are produced by the same producer as the initial staging. (D) Seasonal productions (i) In general In the case of a live staged production not described in subparagraph (B) which is produced or presented by a taxable entity for not more than 10 weeks of the taxable year, subparagraph (A) shall be applied by substituting “6,500” for “3,000”. (ii) Short taxable years For purposes of clause (i), in the case of any taxable year of less than 12 months, the number of weeks for which a production is produced or presented shall be annualized by multiplying the number of weeks the production is produced or presented during such taxable year by 12 and dividing the result by the number of months in such taxable year. (E) Exception A production is not described in this paragraph if such production includes or consists of any performance of conduct described in section 2257(h)(1) of title 18 , United States Code.