This Could Make the Offseason Tough

[e_blazer]

IRS rules requiring attaching asset values to player trades. Yeesh, what a mess that would be.

https://basketball.realgm.com/wiretap/249292/New-Tax-Law-Could-Disrupt-Trades-In-Sports

 

[Strenuus]

Okay, wtf does this ACTUALLY mean? People smarter than I, help!

 

[theprunetang]

I'm not going anywhere near tax law bullshit.

 

[jlprk]

The Internal Revenue Service allowed baseball owners to depreciate the cost of player contracts over several years to reduce the team's taxable income. It declared that “trades of player contracts owned by major league baseball clubs will be considered exchanges of like-kind property” under a section of the tax code.

What a rip-off to the public. Each team not only amortizes player contracts, instead of expensing them in real time--The team also amortizes its original purchase price, saving big on taxes in the initial years, and compensating by paying more tax when the team is sold. In amortization, there are always several schedules from which to choose, to minimize taxes.

http://www.greenberglawoffice.com/roster-depreciation-allowance/

 

[jlprk]

The new law forces manufacturers, farmers and others to pay more in capital gains taxes, if they trade an asset for something more valuable, and it also applies to sports teams trading player.

“There is no fair-market value of a baseball player. There isn’t”...Officials from the NBA and MLB expressed hope that Congress would revisit the provision.

I suppose that the IRS could fix the value of draft picks included in trades, using a sliding scale based upon draft position. To value a player, maybe it would be what he last made, times a multiplier. The formula would no doubt include more variables than that.

 

[GrandpaBlaze]

I suppose that the IRS could fix the value of draft picks included in trades, using a sliding scale based upon draft position. To value a player, maybe it would be what he last made, times a multiplier. The formula would no doubt include more variables than that.

At a certain point the multiplier would be negative depending on age, productivity, health and so forth.

Olshey has done a good job of acquiring players with negative multipliers. Unfortunately he has also paid good money to keep some with negative multipliers.

 

[illmatic99]

So we cant use our TPE to get a player?

 

[GrandpaBlaze]

So we cant use our TPE to get a player?

Perhaps TPEs would be the NBA version of “Goodwill”, a virtual asset than can be acquired or traded.

 

[Wizard Mentor]

Semi-serious question: Does that mean we can write off Biebs, and get a refund from the IRS?

 

[GrandpaBlaze]

Semi-serious question: Does that mean we can write off Biebs, and get a refund from the IRS?

Hmmm, he IS an asset that may need to be written off, we still pay the full purchase price but can we claim it as an asset that has lost value? Kinda like buying a house in a boom and later finding yourself underwater.

Wouldn’t help with the salary cap but now you’re going to get those dreaded Vulcan minds wondering.

 

[handiman]

Semi-serious question: Does that mean we can write off Biebs, and get a refund from the IRS?

New nickname for Meyers and Turner: Death and Taxes.

 

[Mediocre Man]

So could what NO did in 2016

 

[jlprk]

At a certain point the multiplier would be negative depending on age, productivity, health and so forth.

Perhaps TPEs would be the NBA version of “Goodwill”, a virtual asset than can be acquired or traded.

Other intangible variables would be what kind of free agent the player is, or how far from free agency he is...the number of votes he got to make All-NBA, down to 3rd team...PER and many other advanced stats...how he fares in jlprk's posts...the formula will be at least as complicated as this.

https://www.basketball-reference.com/about/per.html