Joel Newman (Wake Forest) passed along an interesting tax angle in today’s New York Times story, What Is a Number Worth? Some Athletes Pay the Price, which recounts how professional athletes who join a new team often will pay a current player for the right to wear a particular uniform number. Some examples in the article:
|
Player Payments for Right to Wear Particular Uniform Number |
|||
|
Payor Player |
Payee Player |
Payment |
Team/Number |
|
Clinton Portis |
Ifeanyi Ohalete |
$40,000 |
Washington Redskins/26 |
|
Brian Jordan |
Fredi Gonzalez |
$40,000 |
Atlanta Braves/33 |
|
Kellen Winslow |
Aaron Shea |
$30,000 |
Cleveland Browns/80 |
|
Ricky Henderson |
Turner Ward |
$25,000 |
Toronto Blue Jays/24 |
|
Mitch Williams |
John Kruk |
2 Cases of Beer |
Philadelphia Phillies/28 |
|
Roger Clemens |
Carlos Delgado |
Rolex Watch |
Toronto Blue Jays/21 |
|
Tom Glavine |
Joe McEwing |
Baby Nursery |
New York Mets/47 |
|
Eli Manning |
Jeff Feagles |
Florida Vacation |
New York Giants/10 |
|
Plaxico Burress |
Jeff Feagles |
New Kitchen |
New York Giants/17 |
Among the many tax issues raised in these cases:
Payor Player
- Currently deductible as ordinary & necessary business expense?
- Amortization deduction? Over what period?
Payee Player
- Income upon receipt of a valuable number?
- Gain on sale? If so, what is the amount of basis to offset against the amount realized?
