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You generally can't write off a loss in a tax deferred account like a 401(k) or IRA .

Unless you bring it out of the account and take the penalty. I was told  by the trust company to show a quote that stated 0 and that they would devalue and cash out.  There would be no IRS penalties for early withdrawal and that the basis would be tax deductible over years.

If you take the money out of a 401(k) you will be subject to a 10% penalty and then the income taxes on the money since it had been deferred. There are exceptions, but taking money out to invest is not one of them.  The money you use for investment from those proceeds will be the basis for future write-offs.   The trust has not given you good advice in my opinion.  Make sure you go to a reputable Tax Preparer or CPA.

agreed. anytime you take money out of IRA or 401k you are subject to 10% penalty plus taxes unless you roll over into another "qualified" account

http://www.fool.com/investing/general/2014/05 ... s-of-oz-fa.aspx
Article on the Motley Fool site about the lessons learned from LOZ investments. One could hope that every little bit of media exposure will mean the end of the line for people taking money and burning through it for their own greedy motives.

I hope people who know these people but did not know much about their business confront them and embarrass them in different settings.

Has anyone asked why they needed a $17M loan when they collected $110M and reported that they spent $70 million making the movie? That would have left $40M -- I mean I'm pretty sure I know how it evaporated but...

probably around June next year you should receive a K1 statement from your respective LLC for tax purposes. You will continue to receive K1's as long as the LLC is active.

I am sorry for tragic tale. All money is lost probably. AS you shared I am sure that Greg did very well. I am speculating that he made close to $15M from this movie. Check with State & Local officials. DOZ was not to be sold in Texas so they switched the name to ECOZ. Did you read article on Motley Fool?

This is a re-post of what I told you'all July 30, 2013, it can be found on page 10 of this website:

30 Jul 2013

"These people have never ever produced a single successful movie, and the distributor has never even distributed a solitary film and everyone is OK with  that???? You gullible green-grass goats! Can‘t you get it through your heads that you‘re being swindled out‘a your eye teeth right now—this minute? There‘s a burglar in the bedroom while you‘re fiddling in the parlor! I‘m talking about  these swindlin' two-bit thimble riggers—road agents—highwaymen—pickpockets.  And if you don‘t hunt these man down right now like mad dogs, there won‘t be any Harold Hill/Greg Centineo either! He‘ll be on the next plane out of the country/town."

Do we tar and feather them now?? Lawyer up and go after them before they're gone!!!!

This may sound crazy, but your best revenge I think will be to get a documentary underway right now - and use the same medium to expose this kind of thing, and the crooks behind it.

It is hard to tell what is a real post and what is not these days. I will agree with some of the comments that it is going to be a difficult road ahead for any investors to recover all of their investment, based on the limited financial info about the project that is out there now. Any legal action is not going to be easy either, as the principals will say that they produced the movie they said they were going to produce and that investors should have know the risk of the movie business. But I am not a lawyer , and I don't know what options investors may have - where they not accredited investors and should the fundraisers have know that? What were investors told about the project and promised? Were the people raising the money properly licensed and in what states? Does the fact that retirement funds were solicited raise any issues?  I am sure someone knows the answers but I will not speculate on what any legal remedy may be because I don't know the answer. I doubt any accredited investors have much recourse at all , unless they can prove out right fraud, because as an accredited investor you are deemed to know the risks. And a box office flop does not equal fraud, it is a business risk.

The main characters in the project are pointing fingers at the distribution company and the critics but don't seem to remember the old saying "when you point a finger at someone, three of your fingers are pointing at yourself". Maybe they can work through this eventually and get the outstanding P&A debt paid back along with the other legal and accounting fees a previous poster mentioned . The money they raised was equity , not debt  , so there is no timeline for those funds have to be paid back. Investors are unfortunately kind of stuck in limbo right now. Sometimes reality sucks - I hope no one put in money that they needed in the near future and that anyone who did put in funds can recover and move on from this and afford to wait it out. Maybe the other revenue sources will bring in some cash over time , but that is just a pure guess at this time.

 The movie still looks like it is running in 650+ theaters as of a couple of days ago, not sure what the metrics are for a theater to keep running a movie? The average gross per theatre was in the mid $250 range , not sure if that is high enough to keep it going ? Here is a link to the latest box office numbers:

http://www.boxofficemojo.com/daily/chart/

The foreign releases are supposed to be happening over the rest of the spring and summer so you can track the progress on the above site. It is also amazing to me how much some of the movies on this site that I have never heard of have done so well at the box office.

I am pissed too.  But, I am more mad at myself than any one else.  We fell for the b.s.  We were naive.  We lost money too.  We didn't know anything about how the movie industry worked.    We had money in both Dorothy of oz (DOZ) and Emerald City of oz (ECOZ).  We lost a total of $120,000 between the two.  I am sorry for your loss, our loss, and all the other investor's losses out there.  We're just regular people too.  We took equity out of our house and moved money from our 401k.  My husband didn't want to invest, but I talked him in to it.  Now, I have that guilt too.  But, who is to blame?  WE are.  

A solicitor called us on the phone back in 2007.  As much as I would like to blame the solicitor, or Neil Kaufman, or Greg C, in the end, WE made the decision to give them money.  No one forced us to write a check.  This may go down as the biggest regret of my life time, but I have only myself to blame.  It was an expensive lesson.

I did minimal research on this investment before we (my husband and I) gave them our money.  Had any of us done any lengthy research, we probably wouldn't have given them our money.  We would have found out that they had never made a successful movie.  I actually asked them about that at the time, but they claimed that Bonne Radford and the others involved in production had years of experience making successful movies and they were going to sign big name celebrities.  Back then, they were considering Miley Cyrus for Dorothy.  I think Kelsey Grammar was already signed on.  Anyway, we fell for it.  Dreams of big money coming in the mail every quarter.  After listening to Greg C. rattle on endlessly about how much money we would all make, comparing DOZ to Shrek and Cars, I knew was a stretch, but yet he did it, month after month for years.  Then, there were all the revenue streams.  How could this fail after all?  Well, we fell for it, not just once, but twice.  We invested twice.  But, again, who is to blame?  We are.  They promised to make a movie.  They made a movie.   They said it would have big name celebrities.  It had big name celebrities.  Who got screwed?  We did.

This sounds corny, but I do try to focus on the fact that we all have our health.  Not on how we lost a SH#7LOAD of money.

You made many honest statements and I agree with your assertion that we all should have researched this more carefully and that we bear blame for our decisions.  But I hold them to blame equally.  They did not work hard.  Yes, they put out a movie.  But I repeat.  The end result in my observation is they did not work hard.  The marketing was terrible, about the worst I have seen for a film with such a big budget.  So yes, they put out a film and did not force us to send the money, but they did not put the work into it that they told us they would.  

I am glad you are making peace with it and I wish you and your husband well.  It is indeed our health (and our faith and families and friends) that matters most.  Agree with that 100%. But I still want to shout to the world "look what these people did" so future novice investors as naive and trusting as us do not fall for it again.

Anytime....I mean ANYTIME someone asks you to put your 401k at risk for an outside investment you need to RUN the other way. Period. And thats all I have to say about that

Lurker has a very sound, logical and questioning approach to this issue. Funds were raised to make a movie and that movie was made. But does anyone know the budget? Has anyone been provided proper financials. How was Alpine / Summertime compensated. In one post they mention that further funds were reserved for admin / legal costs yet more than sufficient funds should have been reserved from the  fund raise, which stated something like 3-7% was reserved for this purposes. I would think that the managing members of the LLC's have a fiduciary responsibility to provide some form of transparency such as Sorbanes Oxley. The concept that revenue may exist from other sources is ludicrous. Shelf space at Walmart is far too precious. There is NO marketing behind. Besides, whatever money there was to be made has already been paid. Foreign markets have already been sold and money collected. BUT none of these funds seem to be accounted for and the only reference seems to be that they put it back into the project. Shouldn't it have been distributed? It would seem $1M in foreign sales would at least represent a 1% return.  I just cant imagine taking someone's life savings. $450K from an IRA, taking a 2nd out on one's home? If you invested $120K then Greg put about $18,000 in his own pocket. I am not sure if that is correct but it would seem to raise a question. Shouldn't the members have a right to know? Somehow $103M was spent plus whatever they did with the $17.5M or whatever the advertising budget was. I mean they had 10 years to figure this out. The must exist some basic formula for the cost necessary to fund an advertising budget of a $70M movie. But then again was it a $70M budget? and if it was $70M that still leaves around $33M unaccounted for. However, if we deduct the known 22% for FEES that's only around $22 and still no answer on the remaining $11M.  Are any financials available? There would seem to be power in numbers. Another good point is who were these people seling this? were they licensed? Is Greg licensed? Did he have a legal right to sell shares as a member of the LLC? There are some good posts on Motley Fool about this matter.

I'm pretty sure I know where it went too, but, yes, excellent question.  I was wondering that same thing.  The math doesn't add up.  I would love to see an accounting of where the $110 million went.  Even Greg C, in an interview with cartoonbrew, said they still had money left and were going to use it to make the next 2 movies and a tv show.  Really?  I think the investors should get a vote on that.  At this point, I think most of us just want our money back.  Even just a portion of it is better than nothing.