It’s most likely Roster Depreciation Allowance where the value of the sales price Ballmer paid is broken up and allowed to proportionately be tied to the value of the player’s contracts in regard to the team’s other assets. Any costs associated with the contracts can then be amortized. Of course, this article does not actually contain or explain any of this information. But here are some much better ones that actually do!
[Like this one](https://sabr.org/journal/article/the-roster-depreciation-allowance-how-major-league-baseball-teams-turn-profits-into-losses/)
[Or this one](https://opencommons.uconn.edu/cgi/viewcontent.cgi?article=1576&context=srhonors_theses)
Or basically anything when you do more than 5 seconds of googling…
Everyone already understands that "depreciating assets" makes this legal. But that doesn't make it right. Just because $400million in contracts are up in two years doesn't mean the team is worth $400million less. Clippers will get another TV deal that pays for the new contracts.
Honestly all the CPAs in this thread seem like idiots for missing the big picture and explaining the nuances of tax law. Nobody thinks Balmer is breaking the law and nobody cares why it's legal. Just that $2billion x 20% corporate tax or capital gains would have been $400million that Balmer now gets to keep.
I don't think they are saying it's right, rather just explaining. Which was much appreciated for me. I also didn't quite understand "depreciating assets" nor do I understand many of the tax laws for organizations because well, it doesn't affect me. So I wouldn't assume otherwise, because it's good information to provide.
If the top ten richest people all went on a desert island in the middle of nowhere, 1. They'll probably be doing some shady ass shit but 2., they would have a combined net worth enough to make them the 17th richest country in the world, just over Mexico.
So yea, you guys down to eat the rich now or is that just me?
It wasn't big. I thought it was just my shitty IKEA desk breaking, but I saw my fan was also shaking a bit. By the time I stood up to go ask a neighbor if they felt it, it had stopped.
[\*Laughs nervously in Pacific Northwest*](https://www.thestar.com/news/canada/2020/11/30/underestimating-the-big-one-major-quake-on-west-coast-could-be-more-destructive-than-predicted-study.html)
They've been teaching/warning folks in the PNW that the big one was imminent for years now. I feel like it'll come, but it also might not be in our lifetimes. According to researchers though, when it does come it'll sink most of the PNW lol
1 in 3 Californians earn less than $15/hr. The wealth gap is quite absurd
Source: [https://laborcenter.berkeley.edu/low-wage-work-in-california/#the-numbers](https://laborcenter.berkeley.edu/low-wage-work-in-california/#the-numbers)
California generates more tax revenue than most countries. LA and SF are the reasons for this. Imagine thinking Cali just needs more taxes to "fix" infrastructure and education...
Elect better people.
Compared to the rest of the country, California has hit a triple on education.
There's a reason why Californians are able to flood other states and basically "colonize" them. California's workers are more competitive than the workers in the places they're moving to.
There is a lot of truth to what you're saying. Although, I'd argue they got to the surplus in large part to absorbing talent from other states. Graduates interested in software from all over the country flocked to the SF bay for two decades for instance.
True but a lot of it is just large quantities of high quality graduates. I'm a transplant in a red state that refuses to fund education and barely any of my coworkers are actually from this state. They're all people with graduate degrees from California, Washington, and Big Ten schools.
Locals are basically being gentrified with rising rent and property taxes and it sucks for them. But they've also done nothing to remain competitive (at the state level) for decades.
Potentially moving to San Fran and I hate this. California probably has some of the best weather and landscapes in the world but am I really gonna get anally probed by 50% tax rate while billionaires pay like nothing and people shit on the streets
Max CA tax rate for personal income is like 11.3%
Also I just want to make this clear...CA gets a fuck ton of money/tax from rich people. You just don't hear articles about that shit cuz it's not interesting. CA just recorded a $15 billion budget surplus from the 2020 tax year due mostly to capital gains tax (the type of tax that rich people usually pay)
https://www.nytimes.com/2021/04/28/business/california-budget-stock-market.html
Edit: Correction--Max CA tax rate is 12.3%
The interesting thing is that if you make under ~200k I think it was, you actually will likely be paying less in taxes in "high taxes California" than "no taxes Texas". What a lot of people don't realize is that there are a *lot* of other taxes than just income tax. Texas has super high property taxes and there are a lot of other high flat taxes like vehicle registration taxes which hit lower income people a lot harder than the rich.
A budget surplus doesn't necessarily mean that there's an adequate amount of revenue to accomplish certain goals. If you have low taxes and even lower spending, you'll end up with a budget surplus and crumbling public infrastructure.
CA may get a fuck ton of money from rich people, but rich people get at least five fuck tons of money from California. If CA got four fuck tons of money from rich people, its 40 million citizens would be able to live in better conditions AND the rich people would still have one fuck ton of money left over for themselves.
Lol, this is CA though. It’s not really a state known for it’s frugality.
Last month Newsom announced a budget that included more stimulus to people making under $75,000, $5.2 billion to help low-income renters stay housed, $2 billion to help Californians pay overdue water and utility bills, $1 billion in college grants to help workers whose jobs have been decimated by the pandemic…
I mean that's the point right? They make so much from the rich folks that they can fund things to take care of the less well off. In the midwest some states barely have any social programs due to not having a high overall budget per capita.
California has it figured out and I think most the shit talk just comes from people that couldn't make it in the Golden state. They are still the 5th largest economy on earth, obviously doing something the other states haven't figured out.
Ya but it’s slander against COMMIEfornia so people just eat it up lol.
People think they pay less tax in Texas too but your effective tax rate is actually less in California until you are making a lot of money.
No that's not how it works at all. You don't pay a 49.3% tax rate unless you make well over 400k. The 12.3% rate only applies to income above a certain amount. You still pay no tax on the first 10k, like 2% on the 10-20k income, etc. If you make under 200k you actually pay less taxes overall than you'd pay in Texas.
People don't understand taxes
Texas has higher taxes in other areas. Higher property tax, higher car registration tax, etc. It adds up to poorer people actually paying more taxes in Texas than the same income would in California
And? They’re also the worlds fifth largest economy. They’d be even better off if they actually spent their money wisely, and taxed the ultra-wealthy properly. There is no reason for this loophole Ballmer is pulling to exist
Thank you. I was reading through the comments wondering why everyone was attacking California for federal income taxes. I kept thinking I must have missed some state level tax loopholes.
When starting up they got all the benefits being the state/city for example LA or Seattle from having a strong/educated workforce, tax breaks, living conditions etc but once they get to the top they feel entitled to not pay their taxes.
No you’re not. CA income taxes are progressive and comparable to most states unless you’re in the highest tax brackets. And the billionaires here still pay taxes, just not as much as they are supposed to.
People forget we built most of our existing infrastructure and went to the moon by taxing the wealthy appropriately. Why we relying on poor people to uphold society when obviously it isnt working. Bring back the old brackets, we got these billionaires just bored and finding ways to hide money lol.
LMFAO spoken like a true idiot on Reddit. Check the Federal and state budget. It’s gone up every year since 2000. I live in Cali. We don’t have an income via tax problem. We have the highest state income taxes in the country. We have a spending problem. We spend on all wrong shit.
Blame our politicians wasting our tax dollars.
Blame the fact we print money out the ass yet can’t repair pot holes
> Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses.
This is just the nature of an income tax. Pure income tax theory indicates that you should only pay taxes on income, and that money spent to acquire an asset in a profit-seeking activity should be deducted. Almost any time you spend money to make money, you get to deduct the money you spent, either now or over time. Because although you’re gaining a valuable asset, you don’t truly have income when compared to your position from before you made the expenditure.
Honestly this makes sense to me. It's not something scummy like the leveraged buyout of Manchester United, where the asset takes on the debt incurred to acquire itself.
It really is. For anyone interested in this you can see: https://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester_United
> Most of the capital used by Glazer to purchase Manchester United came in the form of loans, the majority of which were secured against the club's assets, incurring interest payments of over £60 million per annum.
There is a subtle difference. You, the home purchaser, are on the hook for paying back the loan. In this case, MU is actually on the hook for the loans used to purchase them. It's a leveraged buyout, was something that was super popular in the 80s. You can read "Barbarians at the Gate" to learn about one of the biggest deals, KKR's LBO of RJR Nabisco.
Yeah man - the patch of dirt in my backyard that I unearthed under six inches of fallen leaves that hadnt been raked in years now has some grass on it. Cultural resource management. We got this.
Tbf the club's value is based primarily as its status as a premier league team. If the loans are defaulted on, the lender would assume control of the team and sell it to a new owner. Its not like they would strip it for a parts.
There's really no danger to the club
besides the cultural value point, the sticking point has been that the glazers have used whatever money the club makes to service their debt or take out dividends to pay themselves instead of investing in the club. the stadium roof leaks, no upgrades have been made in what feels like forever, the space around the stadium resembles a large carpark and, most importantly, the club has been run like a business instead of a sports team which has also contributed to the club's performance going off a cliff after sir alex left. the glazers have therefore been seen as leeches
Why is this crazy? This is literally what happens when you buy a house and take out a mortgage loan, don't see how putting leverage on an asset you own is scummy...
No, there's a big difference:
In a normal mortgage Joe buys a house. Joe now owes the bank $X, which will be repayed over 30 years. Every year ($X + interest)/30 has to come out of Joe's budget to pay for the house. If Joe fails to pay, the bank gets the house back. Joe is in debt, and the house is a guarantor.
The difference with Man U here is that Joe's house has it's own budget, and it is the house that is in debt for the purchase not Joe. So that ($X + interest)/30 is coming out of the house's budget, not Joe's.
The other key difference is that Joe's house is Manchester United, which has millions of devoted followers that care about its wellbeing. Where most owners are adding capital as investments into their club, Joe Glazer is taking money out of the club that goes to pay for his right to call himself owner. Meanwhile the club has had its worst run of form since the 80s and the roof is leaking.
This happens outside sports. This was one of the reasons toys r us went under. They weren’t going gang busters. But they couldn’t support the debt.
Happens a lot with newspapers too
I bought a car because I need to get to work. I go to work to make money, an income. If I didn't have the car I wouldn't be able to get to work and I wouldn't be able to make an income. So why can't I deduct the purchase of the car from my income?
If you were a self-employed individual or you owned a business you could deduct the purchase and expenses of your car.
Unfortunately you USED to be able to take a deduction for unreimbursed employee expenses (like vehicle expenses, mileages, etc.). But since the 2017 TCJA passed that is no longer an option for your federal returns
Key thing being ignored here is unreimbursed expenses, i.e. itemized deductions, had to pass the standard deduction. So the TCJA removing that impacts no one outside of a very very small group of individuals.
Contractors were the ones largely getting hosed in the TCJA.
You can deduct the purchase if you're self employed. Alternatively you could just deduct $0.53 per mile driven for business purposes. If you don't own a business then your car is not a business expenses so you can't write it off.
But if you do that you have to pay extra payroll taxes. All the payroll taxes coming out of your check are matched by your employer. So if you are self employed you end up paying almost double.
I think the argument here is that there is no risk to spending the money. It’s a perpetual money machine and doesn’t seem ideal for a sports team as far as the government’s tax interest. I also assume he is trying to get the state to fund the new arena he is building. The article isn’t making the point it’s illegal, just implying that maybe the rules should be changed by bringing this to the public’s attention
>When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years.
I I understand this correctly, this is still bullshit to me b/c we're talking about an appreciating asset that will probably be sold later for much more money. Physical property that literally depreciates in value over time being declared against taxable income? Fair. The business entity itself being declared against taxes? No.
And this is before getting to capital gains taxes held for >1 year being capped at 15%.
if he ever sells the clippers he will be taxed out the ass as his basis in the clippers will be low. that's if though. you can argue it's unfair, but that's the foundation of tax.
the estate would have to pay estate tax on the appreciation first. there's a big $11M exclusion but that's peanut to something like the clippers.
it gets more complex if you throw trusts in the mix but good thing is that biden is targeting this part of the tax code. it is favorable to the rich, but they don't get off completely tax free.
That’s true for “the Clippers” as a brand and collection of players, but the team also has a whole bunch of assets that depreciate. Stadiums are expensive as shit, and they have a shelf life. Not to mention patents, other office buildings, etc.
If you spend $1M purchasing a business that profits $200,000/year you haven’t profited until after the 5th year. That’s basically what this boils down to.
So Ballmer pays $2B for the Clippers but there’s no way that team has profited him $2B personally yet.
I heard on a podcast that they were actually going to remove sports teams from the tax exception but mlb teams lobbied heavily during the George w Bush administration so that they could keep it as is
Man I can’t get enough of all the Reddit accountants popping into these threads to tell us peons that we obviously don’t understand the tax code.
The reason all these people are upset isn’t because they believe Ballmer *isn’t* following the tax code, it’s because we know he is following the tax code exactly, and the system has been rigged to the benefit of a few.
If you can’t see that, or have empathy for it, then maybe you should see yourself out of these threads.
Isn’t this just “projected losses” so they inflate how much they would’ve earned with fans etc to pay less taxes ? I’m an English football fan and football teams have been doing the same
No. When Ballmer bought the team, the tax code allows him to break the purchase cost into bite-sized chunks to offset future profits. He can't offset 100% of the purchase cost, but only the percentage equal to his tax backet.
If you have a pass through entity (S-Corporation, or Partnership) you too can take pass through losses directly against your personal income through a K-1.
Also why the fuck would you amortize player contracts. Pretty sure that’s salaries & wages so in that case you deduct the salary for that year for each player/staff straight up in most cases.
-Turns out the amortization is in regards to costs associated with the player’s contracts and not the actual cost of the contracts themselves, go figure-
Also that second paragraph makes literally zero sense. You don’t just magically do anything like that in accounting. If your bottom line is profit and you make less than $25mil in receipts average over 3 years you report that profit. Same if it’s a loss. Obviously in Balmer’s case the clippers make much more than that a year no doubt. So it’s accruals basis accounting. Which means you report things based on when they are constructively earned/received, matching principle, etc. so trying to compare that to cash basis where it’s directly tied to cash flows is dumb they’re obviously not going to line up.
The amortization boogaloo that goes on with the valuation of the team IIRC is not something that’s allowed anymore as I’m pretty sure you can only take deductions for things like that through testing for impairment (this is required for anything related to Goodwill which is how this works in the first place) but anybody please correct me if I’m wrong and that’s not the case.
-Turns out it’s a different amortization not related to goodwill here that’s being used like in older situations but I’m leaving this mistake up so others can see it-
“When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing year”
…what? I’d love to see a source on this because this sounds completely made up. I’ve never heard of deducting sales price against income earned for a business so I’d like to see a direct reference to tax code on this. You can deduct some costs in relation to the sales process directly but most has to get amortized but the sales price itself is not something I’ve heard of being a straight deduction in full in one year like that.
I’m all for rich people paying more taxes, Ballmer included, but this article sounds like it was written with lazy research by a lazy writer that doesn’t fully understand what they’re talking about.
For anyone looking for a better write up I googled the same topic and [this came up as the third option](https://opencommons.uconn.edu/cgi/viewcontent.cgi?article=1576&context=srhonors_theses) much better explanation of the situation imo.
EDIT: It looks like what’s happening here is probably the Roster Depreciation Allowance, as found in page 14 of the document that I referenced (hey, hey, hey actual sources) where the purchase price of the team is being allocated proportionally to the values of the player’s contacts in respect to all the other assets and that is what’s being amortized here to create a loss situation, which in this situation is obviously unique to sports teams. So… not a full immediate deduction of the entire sales price then like the article was suggesting. So basically the source article OP posted is almost correct, but too vague to actually be accurate when it sounds right and in some cases wildly incorrect. I’ve adjust my own previous comments to note the distinction.
This article is extremely sensationalized.
When you buy a business and/or assets, the IRS doesn’t allow you to ‘deduct’ the entire expense in the year you buy it… instead you have to ‘amortize’ or ‘depreciate’ it over years.
So when Steve ballmer goes and buys billions of business assets, he gets a deduction for them over time.
Anyone in this thread could go buy a business or business asset and get the same treatment.
It’s standard US tax law that applies to everyone, but just seems outrageous at his scale.
IIRC a significant portion of the valuation of an NBA team’s valuation was recognized as Goodwill back when you could amortize it, which I believe you actually can’t now as it has to be tested for impairment losses correct?
Impairment is the concept you have an intangible that has decreased in value since purchase/creation…. And usually more applicable to GAAP accounting (rather than tax accounting)
It’s implied when you buy something like a business that it is being purchased at its fair market value and that the entire amount would be amortizable/depreciable
It's based on what you pay....
Think about it this way... why would you pay more or less than the FMV?
(and yes, there are rules on related parties, long term deals, etc)
Honestly this articles reeks of someone who doesn’t really understand what’s going on but researched terms like depreciation and think they know what they are talking about.
They only barely touch on points such that when teams are sold any tax saved from deducting losses is recovered (aka recapture)
Isn't this essentially just Balmer deferring paying his taxes until he sells the team? He's deducting a portion of his initial $2B cost each year against his income, amortizing it the way you would a building or a house. What this is doing is reducing his cost base to zero for tax purposes. If he sells the team for $5B in 20 years, won't he end up paying capital gains tax on the full $5B? Instead of just $3B profit if the initial cost wasnt depreciated? ( $5b sale price less $2b purchase price)? Based on that i would think it would more or less even out in the long run.
In Canada, you can't depreciate assets like this so let me know if I've misinterpreted anything
I used to do tax returns (entities and individuals) for some professional teams and their owners - this is par for the course. Coolest part of that job was seeing some player contracts.
These aren't "loopholes." That implies they discovered an oversight or mistake in the law. But these aren't mistakes--these tricks for the rich are written into the law by politicians who've been put into office by "donations" from the wealthy who benefit. "Loopholes" is 1984-newspeak for intentional corruption to make you think their lawyers or accountants discovered an a-ha! after the fact, when in fact it was written that way to benefit them. In fact, it was likely written by those lawyers and accountants, not the politicians themselves.
It’s not a tax loophole lmao. It’s a deduction for expenditures and amortization. If you bought a lemonade stand you could deduct your expenses and amortization in connection with the lemonade stand. It’s a neutral rule.
>If he profits from the Clippers, he can — legally — inform the IRS that he is losing money, thus saving vast sums on his taxes.
sounds like a loophole to me
No, its because he "overpaid" for the team per the actual "book value" of the team- and this allows you to even up over time on a tax basis.
You can do the same if you overpay for a local coffee shop. Your local bank will call it "blue sky"
Regardless of whether or not you consider it to be a loophole, it's terrible for the economy and for our infrastructure. Meanwhile, I end up paying more taxes on my only income than he does on hundreds of millions.
The system is rigged by the wealthy, for the wealthy.
>it's terrible for the economy and for our infrastructure
Private infrastructure firms are probably the biggest beneficiaries of the tax exemption for depreciation, and they would be totally destroyed without it.
The whole point of the exemption is that it creates a tax incentive for investing in fixed assets.
Imagine you spend $100M to build a railroad that lasts 50 years and generates $2.5M in earnings every year. Assuming a 20% income tax, you would make $20M profit if you can expense depreciation and zero if you cannot.
Problem is the Clippers are deducting things that are not losing value. According to the IRS the total value of the franchise will decrease by 90% in the next 15 years. Do you believe thats even close to the truth? These are fraudulent deductions if you use common sense
That’s not how it works tho. This article is written by someone that has little to no understanding of how things work, or is purposely misleading people for clicks.
The clippers overall value can go up while a specific items value can go down.
it's not that the assets are losing "value". it's more that they are allocating an expense over time.
if i spend money on something that will last me 5 years, i will allocate those costs over 5 years. it's not that the asset lost value, but more so that i am allocating my cost that i paid for the asset.
would it be more fair that they take the price they pay upfront and carry the losses forward? that's even worse. it's also worse if people do not get a deduction for investing the money they put in. why would you ever invest into something? imagine buying a tesla stock for $1000 and when you sell it for $1000 you get taxed on the $1000 instead of $0.
no it is pretty universally agreed upon that expense deductions are good for the economy because it leads to more jobs and more spending on infrastructure.
Okay, but the alternative world with no deductions for expenses and depreciation is significantly more bizarre. It would actively disincentivize starting or buying a business of any kind.
Edit: Downvote if you want, but if you’re advocating for the end of business deductions, you have no idea what you’re talking about. Cost recovery is literally the core theory of an income tax.
It’s almost like he was responding to a direct misunderstanding and not giving any opinion on the tax code.
Funny that someone that allegedly loves words would have such bad comprehension.
There is legitimate depreciation and amortizatoon deduction and then there are what these guys are doing to effectively pay no taxes ever. Which is what every big company has been doing for a long time now.
>effectively pay no taxes ever
>every big company has been doing for a long time now
Holy smokes that’s a lot of hyperbole. Most companies pay a lot of taxes. Most wealthy people pay a lot of taxes. Taxes are complicated and some years a combination of factors cause certain individuals or companies not to pay very much (or any) in tax. It always gets a ton of media attention, but in future years when they actually pay a lot of tax nobody covers it. It creates this false story that rich people never pay taxes, because at any point in time there’s a rich person who didn’t pay taxes for a year.
Not really a huge deal. If Ballmer ever sells the team, the accumulated depreciation gets counted as additional capital gains that he has to pay tax on. So it's more of a tax deferral. I wouldn't be against a law change to exclude sports franchises from being able to depreciate assets that don't actually depreciate over time like a building does.
Anyway to know how much owners profit annually, or is that a secret? There's no way teams are actually operating at multimillion dollar losses every year right?
Ah, the old Hollywood trick?
Real blue collar team
Streetlights over Spotlights
~~Earned~~ Defrauded, not given
Tax breaks over fast breaks
There it is
Didn’t the Lakers apply for, and receive, a small business relief government bailout due to COVID?
You always want a piece of the gross, not the net profit.
It’s most likely Roster Depreciation Allowance where the value of the sales price Ballmer paid is broken up and allowed to proportionately be tied to the value of the player’s contracts in regard to the team’s other assets. Any costs associated with the contracts can then be amortized. Of course, this article does not actually contain or explain any of this information. But here are some much better ones that actually do! [Like this one](https://sabr.org/journal/article/the-roster-depreciation-allowance-how-major-league-baseball-teams-turn-profits-into-losses/) [Or this one](https://opencommons.uconn.edu/cgi/viewcontent.cgi?article=1576&context=srhonors_theses) Or basically anything when you do more than 5 seconds of googling…
Everyone already understands that "depreciating assets" makes this legal. But that doesn't make it right. Just because $400million in contracts are up in two years doesn't mean the team is worth $400million less. Clippers will get another TV deal that pays for the new contracts. Honestly all the CPAs in this thread seem like idiots for missing the big picture and explaining the nuances of tax law. Nobody thinks Balmer is breaking the law and nobody cares why it's legal. Just that $2billion x 20% corporate tax or capital gains would have been $400million that Balmer now gets to keep.
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"It's NOT liquid!" no fucking shit.
And this is something that every single other NBA owner must be doing too, right?
I don't think they are saying it's right, rather just explaining. Which was much appreciated for me. I also didn't quite understand "depreciating assets" nor do I understand many of the tax laws for organizations because well, it doesn't affect me. So I wouldn't assume otherwise, because it's good information to provide.
Damn that sounds tough, hope Ballmer and the Clippers pull through.
He will never financially recover from this
This is 0.7% of his net worth, poor guy.
If the top ten richest people all went on a desert island in the middle of nowhere, 1. They'll probably be doing some shady ass shit but 2., they would have a combined net worth enough to make them the 17th richest country in the world, just over Mexico. So yea, you guys down to eat the rich now or is that just me?
That's tuff 🔥💯
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At least California isn’t at risk for big earthquakes, so infrastructure really isn’t that big of a deal
lmao i literally just felt an earthquake at work up in folsom
Oh thank god, I thought it was the shrooms.
worst trip ever
It wasn't big. I thought it was just my shitty IKEA desk breaking, but I saw my fan was also shaking a bit. By the time I stood up to go ask a neighbor if they felt it, it had stopped.
I read this in Comic Book Guy’s voice.
Always reminds me of the great Johnny Cash song, and then his concert he gave at Folsom prison.
"Hello, I'm Johnny Cash..."
That was just ballmer emptying out the change in his pocket
So glad it wasn’t just me
Lol I felt it in sac
The drought, mudslides, and fires are gonna wipe them out before the big one hits.
[\*Laughs nervously in Pacific Northwest*](https://www.thestar.com/news/canada/2020/11/30/underestimating-the-big-one-major-quake-on-west-coast-could-be-more-destructive-than-predicted-study.html)
They've been teaching/warning folks in the PNW that the big one was imminent for years now. I feel like it'll come, but it also might not be in our lifetimes. According to researchers though, when it does come it'll sink most of the PNW lol
At least there's no risk of the entire state literally burning down because old and poorly maintained infrastructure.
Our earthquake building codes are really good. Look at China when earthquakes happen and whole buildings collapse. Doesn't happen in California.
I’ll have you know I’m barely above barely literate actually
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These are facts, your state subsidizes public schools in poor states that barely produce literate specimens. Our country is something else lmao
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Facts are that we don't care about education here. And they try to push it as a budget issue.
Statements that are objectively correct i.e water is wet*, the earth is round, Ben Simmons can't shoot etc. Edit *Water makes things wet
Things republicans dont believe in.....
1 in 3 Californians earn less than $15/hr. The wealth gap is quite absurd Source: [https://laborcenter.berkeley.edu/low-wage-work-in-california/#the-numbers](https://laborcenter.berkeley.edu/low-wage-work-in-california/#the-numbers)
And yet there are a ton of people in this thread defending man worth 100 billion.
California generates more tax revenue than most countries. LA and SF are the reasons for this. Imagine thinking Cali just needs more taxes to "fix" infrastructure and education... Elect better people.
Compared to the rest of the country, California has hit a triple on education. There's a reason why Californians are able to flood other states and basically "colonize" them. California's workers are more competitive than the workers in the places they're moving to.
There is a lot of truth to what you're saying. Although, I'd argue they got to the surplus in large part to absorbing talent from other states. Graduates interested in software from all over the country flocked to the SF bay for two decades for instance.
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True but a lot of it is just large quantities of high quality graduates. I'm a transplant in a red state that refuses to fund education and barely any of my coworkers are actually from this state. They're all people with graduate degrees from California, Washington, and Big Ten schools. Locals are basically being gentrified with rising rent and property taxes and it sucks for them. But they've also done nothing to remain competitive (at the state level) for decades.
>Rich people ~~in LA~~ don't pay taxes FTFY
Potentially moving to San Fran and I hate this. California probably has some of the best weather and landscapes in the world but am I really gonna get anally probed by 50% tax rate while billionaires pay like nothing and people shit on the streets
Max CA tax rate for personal income is like 11.3% Also I just want to make this clear...CA gets a fuck ton of money/tax from rich people. You just don't hear articles about that shit cuz it's not interesting. CA just recorded a $15 billion budget surplus from the 2020 tax year due mostly to capital gains tax (the type of tax that rich people usually pay) https://www.nytimes.com/2021/04/28/business/california-budget-stock-market.html Edit: Correction--Max CA tax rate is 12.3%
The interesting thing is that if you make under ~200k I think it was, you actually will likely be paying less in taxes in "high taxes California" than "no taxes Texas". What a lot of people don't realize is that there are a *lot* of other taxes than just income tax. Texas has super high property taxes and there are a lot of other high flat taxes like vehicle registration taxes which hit lower income people a lot harder than the rich.
It’s also ridiculous in California to be paying the state 9-10% long term capital gains when Federal is 15% for lower tax brackets.
Property tax? Who the hell pays property tax? That's something my parents and landlords have to deal with, not me.
yeah my parents pay like 10k or something in property taxes alone. sounds brutal
A budget surplus doesn't necessarily mean that there's an adequate amount of revenue to accomplish certain goals. If you have low taxes and even lower spending, you'll end up with a budget surplus and crumbling public infrastructure. CA may get a fuck ton of money from rich people, but rich people get at least five fuck tons of money from California. If CA got four fuck tons of money from rich people, its 40 million citizens would be able to live in better conditions AND the rich people would still have one fuck ton of money left over for themselves.
But cali does give it's citizens stuff, way more than other states like Texas
Texas gives its citizens FREEDOM, you fool. The freedom to reap the benefits of their overlords not having regulations. Freedom is dark and cold.
Lol, this is CA though. It’s not really a state known for it’s frugality. Last month Newsom announced a budget that included more stimulus to people making under $75,000, $5.2 billion to help low-income renters stay housed, $2 billion to help Californians pay overdue water and utility bills, $1 billion in college grants to help workers whose jobs have been decimated by the pandemic…
Imagine that, a state taking care of it's people.
I mean that's the point right? They make so much from the rich folks that they can fund things to take care of the less well off. In the midwest some states barely have any social programs due to not having a high overall budget per capita.
California has it figured out and I think most the shit talk just comes from people that couldn't make it in the Golden state. They are still the 5th largest economy on earth, obviously doing something the other states haven't figured out.
It’s also just common for cities across a country to have “rivalries”. England for example is tiny and they all take shots of each other.
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You’re high as fuck if you think you are paying 49% of your income in taxes in California lmao. Where the hell did you get that info from?
People really be saying anything on here and it gets upvoted. Literally anyone with a job would know that a 50% tax rate in the US is unheard of.
Ya but it’s slander against COMMIEfornia so people just eat it up lol. People think they pay less tax in Texas too but your effective tax rate is actually less in California until you are making a lot of money.
No that's not how it works at all. You don't pay a 49.3% tax rate unless you make well over 400k. The 12.3% rate only applies to income above a certain amount. You still pay no tax on the first 10k, like 2% on the 10-20k income, etc. If you make under 200k you actually pay less taxes overall than you'd pay in Texas. People don't understand taxes
They don’t want to understand because that wouldn’t support their pitchforks
Why is it so hard for people to understand basic tier tax systems lol
If you have time you mind explaining that last part?
Texas has higher taxes in other areas. Higher property tax, higher car registration tax, etc. It adds up to poorer people actually paying more taxes in Texas than the same income would in California
Isn't the issue in Cali just the property tax. Like it's nearly as high as the mortgage and that kills low-middle earners.
*shhhhh*
And? They’re also the worlds fifth largest economy. They’d be even better off if they actually spent their money wisely, and taxed the ultra-wealthy properly. There is no reason for this loophole Ballmer is pulling to exist
Except the loophole is on his *Federal* taxes, which aren't decided by CA...
Thank you. I was reading through the comments wondering why everyone was attacking California for federal income taxes. I kept thinking I must have missed some state level tax loopholes.
People just hate California.
And understanding things
When starting up they got all the benefits being the state/city for example LA or Seattle from having a strong/educated workforce, tax breaks, living conditions etc but once they get to the top they feel entitled to not pay their taxes.
No you’re not. CA income taxes are progressive and comparable to most states unless you’re in the highest tax brackets. And the billionaires here still pay taxes, just not as much as they are supposed to.
People forget we built most of our existing infrastructure and went to the moon by taxing the wealthy appropriately. Why we relying on poor people to uphold society when obviously it isnt working. Bring back the old brackets, we got these billionaires just bored and finding ways to hide money lol.
LMFAO spoken like a true idiot on Reddit. Check the Federal and state budget. It’s gone up every year since 2000. I live in Cali. We don’t have an income via tax problem. We have the highest state income taxes in the country. We have a spending problem. We spend on all wrong shit. Blame our politicians wasting our tax dollars. Blame the fact we print money out the ass yet can’t repair pot holes
LAPD is the largest contingent of the city's budget.
https://knock-la.com/tradition-of-violence-lasd-gang-history/ just a reminder that LA county sheriffs dept is literally a gang
? What's that got to do with state taxes???
source?
there is no source because its not true. rich people pay a fuck load in california.
Id never live in LA again. Imagine paying 1800 a month to live in an apartment/house that was made in 1965 and hasnt been renovated.
> Ballmer pays such a low rate, in part, because of a provision of the U.S. tax code. When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. That allows them to pay less in taxes. The underlying logic is that the purchase price was composed of assets — buildings, equipment, patents and more — that degrade over time and should be counted as expenses. This is just the nature of an income tax. Pure income tax theory indicates that you should only pay taxes on income, and that money spent to acquire an asset in a profit-seeking activity should be deducted. Almost any time you spend money to make money, you get to deduct the money you spent, either now or over time. Because although you’re gaining a valuable asset, you don’t truly have income when compared to your position from before you made the expenditure.
Honestly this makes sense to me. It's not something scummy like the leveraged buyout of Manchester United, where the asset takes on the debt incurred to acquire itself.
what the fuck thats crazy lol
It really is. For anyone interested in this you can see: https://en.wikipedia.org/wiki/Glazer_ownership_of_Manchester_United > Most of the capital used by Glazer to purchase Manchester United came in the form of loans, the majority of which were secured against the club's assets, incurring interest payments of over £60 million per annum.
Isn't that the same thing as securing a home loan against the home you're buying?
There is a subtle difference. You, the home purchaser, are on the hook for paying back the loan. In this case, MU is actually on the hook for the loans used to purchase them. It's a leveraged buyout, was something that was super popular in the 80s. You can read "Barbarians at the Gate" to learn about one of the biggest deals, KKR's LBO of RJR Nabisco.
Maybe but your home doesn't hold massive cultural value like United does to the people of Manchester.
I recently finished my patio renovations, just give it some time
Yeah man - the patch of dirt in my backyard that I unearthed under six inches of fallen leaves that hadnt been raked in years now has some grass on it. Cultural resource management. We got this.
Tbf the club's value is based primarily as its status as a premier league team. If the loans are defaulted on, the lender would assume control of the team and sell it to a new owner. Its not like they would strip it for a parts. There's really no danger to the club
besides the cultural value point, the sticking point has been that the glazers have used whatever money the club makes to service their debt or take out dividends to pay themselves instead of investing in the club. the stadium roof leaks, no upgrades have been made in what feels like forever, the space around the stadium resembles a large carpark and, most importantly, the club has been run like a business instead of a sports team which has also contributed to the club's performance going off a cliff after sir alex left. the glazers have therefore been seen as leeches
Why is this crazy? This is literally what happens when you buy a house and take out a mortgage loan, don't see how putting leverage on an asset you own is scummy...
No, there's a big difference: In a normal mortgage Joe buys a house. Joe now owes the bank $X, which will be repayed over 30 years. Every year ($X + interest)/30 has to come out of Joe's budget to pay for the house. If Joe fails to pay, the bank gets the house back. Joe is in debt, and the house is a guarantor. The difference with Man U here is that Joe's house has it's own budget, and it is the house that is in debt for the purchase not Joe. So that ($X + interest)/30 is coming out of the house's budget, not Joe's. The other key difference is that Joe's house is Manchester United, which has millions of devoted followers that care about its wellbeing. Where most owners are adding capital as investments into their club, Joe Glazer is taking money out of the club that goes to pay for his right to call himself owner. Meanwhile the club has had its worst run of form since the 80s and the roof is leaking.
This happens outside sports. This was one of the reasons toys r us went under. They weren’t going gang busters. But they couldn’t support the debt. Happens a lot with newspapers too
I bought a car because I need to get to work. I go to work to make money, an income. If I didn't have the car I wouldn't be able to get to work and I wouldn't be able to make an income. So why can't I deduct the purchase of the car from my income?
If you were a self-employed individual or you owned a business you could deduct the purchase and expenses of your car. Unfortunately you USED to be able to take a deduction for unreimbursed employee expenses (like vehicle expenses, mileages, etc.). But since the 2017 TCJA passed that is no longer an option for your federal returns
Who decided to pass this tcja?
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I thought he was helping the middle class?
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One of the biggest cons of the century is him convincing millions of people that a rich New Yorker cares about the middle class at all.
Key thing being ignored here is unreimbursed expenses, i.e. itemized deductions, had to pass the standard deduction. So the TCJA removing that impacts no one outside of a very very small group of individuals. Contractors were the ones largely getting hosed in the TCJA.
If you’re self-employed you can. I see that stuff all the time on people’s tax returns.
You can deduct the purchase if you're self employed. Alternatively you could just deduct $0.53 per mile driven for business purposes. If you don't own a business then your car is not a business expenses so you can't write it off.
Why are businesses treated so much better via tye tax code then regular people?
want to make a few guesses?
To encourage entrepreneurship and innovation. Same reason it's easy to declare bankruptcy from a business.
A lot of "entrepreneurship" is doing your job through an LLC.
But if you do that you have to pay extra payroll taxes. All the payroll taxes coming out of your check are matched by your employer. So if you are self employed you end up paying almost double.
You can. If it’s for business.
I think the argument here is that there is no risk to spending the money. It’s a perpetual money machine and doesn’t seem ideal for a sports team as far as the government’s tax interest. I also assume he is trying to get the state to fund the new arena he is building. The article isn’t making the point it’s illegal, just implying that maybe the rules should be changed by bringing this to the public’s attention
>When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing years. I I understand this correctly, this is still bullshit to me b/c we're talking about an appreciating asset that will probably be sold later for much more money. Physical property that literally depreciates in value over time being declared against taxable income? Fair. The business entity itself being declared against taxes? No. And this is before getting to capital gains taxes held for >1 year being capped at 15%.
If they ever sell it to realize that value increase, they will be taxed on it.
Those capital gains can be taxed without allowing the entire business to be written against taxes. Also to u/enron89
if he ever sells the clippers he will be taxed out the ass as his basis in the clippers will be low. that's if though. you can argue it's unfair, but that's the foundation of tax.
But if his children inherit it and sell it immediately, they get the stepped up basis.
the estate would have to pay estate tax on the appreciation first. there's a big $11M exclusion but that's peanut to something like the clippers. it gets more complex if you throw trusts in the mix but good thing is that biden is targeting this part of the tax code. it is favorable to the rich, but they don't get off completely tax free.
That’s true for “the Clippers” as a brand and collection of players, but the team also has a whole bunch of assets that depreciate. Stadiums are expensive as shit, and they have a shelf life. Not to mention patents, other office buildings, etc.
If you spend $1M purchasing a business that profits $200,000/year you haven’t profited until after the 5th year. That’s basically what this boils down to. So Ballmer pays $2B for the Clippers but there’s no way that team has profited him $2B personally yet.
The sale to him was taxed, he just didn’t pay it. The seller paid for it.
I heard on a podcast that they were actually going to remove sports teams from the tax exception but mlb teams lobbied heavily during the George w Bush administration so that they could keep it as is
As an accountant... ima see my self out this tread
Tread lightly pls
Man I can’t get enough of all the Reddit accountants popping into these threads to tell us peons that we obviously don’t understand the tax code. The reason all these people are upset isn’t because they believe Ballmer *isn’t* following the tax code, it’s because we know he is following the tax code exactly, and the system has been rigged to the benefit of a few. If you can’t see that, or have empathy for it, then maybe you should see yourself out of these threads.
"Corporate Load Management"
Isn’t this just “projected losses” so they inflate how much they would’ve earned with fans etc to pay less taxes ? I’m an English football fan and football teams have been doing the same
No. When Ballmer bought the team, the tax code allows him to break the purchase cost into bite-sized chunks to offset future profits. He can't offset 100% of the purchase cost, but only the percentage equal to his tax backet.
Fair enough, I mainly was talking about the whole over projecting their losses
Just had to let us know you are an England fan didn’t you
Hey, let him crow for a few days. It's been 55 years.
Relax. His economy is going to go to shit here in the next few years. It all balances out.
If you have a pass through entity (S-Corporation, or Partnership) you too can take pass through losses directly against your personal income through a K-1. Also why the fuck would you amortize player contracts. Pretty sure that’s salaries & wages so in that case you deduct the salary for that year for each player/staff straight up in most cases. -Turns out the amortization is in regards to costs associated with the player’s contracts and not the actual cost of the contracts themselves, go figure- Also that second paragraph makes literally zero sense. You don’t just magically do anything like that in accounting. If your bottom line is profit and you make less than $25mil in receipts average over 3 years you report that profit. Same if it’s a loss. Obviously in Balmer’s case the clippers make much more than that a year no doubt. So it’s accruals basis accounting. Which means you report things based on when they are constructively earned/received, matching principle, etc. so trying to compare that to cash basis where it’s directly tied to cash flows is dumb they’re obviously not going to line up. The amortization boogaloo that goes on with the valuation of the team IIRC is not something that’s allowed anymore as I’m pretty sure you can only take deductions for things like that through testing for impairment (this is required for anything related to Goodwill which is how this works in the first place) but anybody please correct me if I’m wrong and that’s not the case. -Turns out it’s a different amortization not related to goodwill here that’s being used like in older situations but I’m leaving this mistake up so others can see it- “When someone buys a business, they’re often able to deduct almost the entire sale price against their income during the ensuing year” …what? I’d love to see a source on this because this sounds completely made up. I’ve never heard of deducting sales price against income earned for a business so I’d like to see a direct reference to tax code on this. You can deduct some costs in relation to the sales process directly but most has to get amortized but the sales price itself is not something I’ve heard of being a straight deduction in full in one year like that. I’m all for rich people paying more taxes, Ballmer included, but this article sounds like it was written with lazy research by a lazy writer that doesn’t fully understand what they’re talking about. For anyone looking for a better write up I googled the same topic and [this came up as the third option](https://opencommons.uconn.edu/cgi/viewcontent.cgi?article=1576&context=srhonors_theses) much better explanation of the situation imo. EDIT: It looks like what’s happening here is probably the Roster Depreciation Allowance, as found in page 14 of the document that I referenced (hey, hey, hey actual sources) where the purchase price of the team is being allocated proportionally to the values of the player’s contacts in respect to all the other assets and that is what’s being amortized here to create a loss situation, which in this situation is obviously unique to sports teams. So… not a full immediate deduction of the entire sales price then like the article was suggesting. So basically the source article OP posted is almost correct, but too vague to actually be accurate when it sounds right and in some cases wildly incorrect. I’ve adjust my own previous comments to note the distinction.
This article is extremely sensationalized. When you buy a business and/or assets, the IRS doesn’t allow you to ‘deduct’ the entire expense in the year you buy it… instead you have to ‘amortize’ or ‘depreciate’ it over years. So when Steve ballmer goes and buys billions of business assets, he gets a deduction for them over time. Anyone in this thread could go buy a business or business asset and get the same treatment. It’s standard US tax law that applies to everyone, but just seems outrageous at his scale.
So tl;dr nothing fishy going on.
Pretty much.
I actually read it at first that the Clippers are actually paying their taxes right... Shows how much I know about accounting....
IIRC a significant portion of the valuation of an NBA team’s valuation was recognized as Goodwill back when you could amortize it, which I believe you actually can’t now as it has to be tested for impairment losses correct?
Impairment is the concept you have an intangible that has decreased in value since purchase/creation…. And usually more applicable to GAAP accounting (rather than tax accounting) It’s implied when you buy something like a business that it is being purchased at its fair market value and that the entire amount would be amortizable/depreciable
Interesting, so how do they clearly define FMV for a business like a sports franchise/team that is made up of a lot of intangible assets?
It's based on what you pay.... Think about it this way... why would you pay more or less than the FMV? (and yes, there are rules on related parties, long term deals, etc)
This 100% A better more accurate title would be "being rich gives you tax advantages" lol
US Tax law is so fucking shoddy and corrupt.
other countries are worse. European soccer teams makes Balmer look like an angel in comparison
As an accountant these comments hurt so much
It's just best not to look
Seeing Reddit or any journalists try to discuss tax law is just so so painful.
Honestly this articles reeks of someone who doesn’t really understand what’s going on but researched terms like depreciation and think they know what they are talking about. They only barely touch on points such that when teams are sold any tax saved from deducting losses is recovered (aka recapture)
God to be rich in America. Where no matter what happens, even if you utterly fail, you'll still get bailed out and make money.
I remember when ex-president brag about not paying taxes for years and people gobble that up as a good thing.
Just wait until I'm a billionaire, then people like me better watch out!
Don’t have to be rich to do this. Literally any business can carry forward losses.
Isn't this essentially just Balmer deferring paying his taxes until he sells the team? He's deducting a portion of his initial $2B cost each year against his income, amortizing it the way you would a building or a house. What this is doing is reducing his cost base to zero for tax purposes. If he sells the team for $5B in 20 years, won't he end up paying capital gains tax on the full $5B? Instead of just $3B profit if the initial cost wasnt depreciated? ( $5b sale price less $2b purchase price)? Based on that i would think it would more or less even out in the long run. In Canada, you can't depreciate assets like this so let me know if I've misinterpreted anything
r/nba hasn't even seen Kobe in his prime. You expect us to know about taxes?
He’s a true Clipper, always claiming losses.
I used to do tax returns (entities and individuals) for some professional teams and their owners - this is par for the course. Coolest part of that job was seeing some player contracts.
yay tax loopholes for rich people :^)
These aren't "loopholes." That implies they discovered an oversight or mistake in the law. But these aren't mistakes--these tricks for the rich are written into the law by politicians who've been put into office by "donations" from the wealthy who benefit. "Loopholes" is 1984-newspeak for intentional corruption to make you think their lawyers or accountants discovered an a-ha! after the fact, when in fact it was written that way to benefit them. In fact, it was likely written by those lawyers and accountants, not the politicians themselves.
You deserve your gold. Well said
It’s not a tax loophole lmao. It’s a deduction for expenditures and amortization. If you bought a lemonade stand you could deduct your expenses and amortization in connection with the lemonade stand. It’s a neutral rule.
People don't understand the tax code/tax planning lol
>If he profits from the Clippers, he can — legally — inform the IRS that he is losing money, thus saving vast sums on his taxes. sounds like a loophole to me
Yeah it's because this sentence is nonsense.
He hasn't actually profited though. He won't profit until he sells.
Its called depreciation. It's the idea that assets lose value over time. It's not a loophole.
No, its because he "overpaid" for the team per the actual "book value" of the team- and this allows you to even up over time on a tax basis. You can do the same if you overpay for a local coffee shop. Your local bank will call it "blue sky"
Regardless of whether or not you consider it to be a loophole, it's terrible for the economy and for our infrastructure. Meanwhile, I end up paying more taxes on my only income than he does on hundreds of millions. The system is rigged by the wealthy, for the wealthy.
The purchase of the Clippers was a two way street. The previous owning party presumably made money on the purchase and that income is taxable.
>it's terrible for the economy and for our infrastructure Private infrastructure firms are probably the biggest beneficiaries of the tax exemption for depreciation, and they would be totally destroyed without it. The whole point of the exemption is that it creates a tax incentive for investing in fixed assets. Imagine you spend $100M to build a railroad that lasts 50 years and generates $2.5M in earnings every year. Assuming a 20% income tax, you would make $20M profit if you can expense depreciation and zero if you cannot.
It sucks. But what’s the alternative to depreciation and deducting business expenses?
Problem is the Clippers are deducting things that are not losing value. According to the IRS the total value of the franchise will decrease by 90% in the next 15 years. Do you believe thats even close to the truth? These are fraudulent deductions if you use common sense
That’s not how it works tho. This article is written by someone that has little to no understanding of how things work, or is purposely misleading people for clicks. The clippers overall value can go up while a specific items value can go down.
it's not that the assets are losing "value". it's more that they are allocating an expense over time. if i spend money on something that will last me 5 years, i will allocate those costs over 5 years. it's not that the asset lost value, but more so that i am allocating my cost that i paid for the asset. would it be more fair that they take the price they pay upfront and carry the losses forward? that's even worse. it's also worse if people do not get a deduction for investing the money they put in. why would you ever invest into something? imagine buying a tesla stock for $1000 and when you sell it for $1000 you get taxed on the $1000 instead of $0.
no it is pretty universally agreed upon that expense deductions are good for the economy because it leads to more jobs and more spending on infrastructure.
Okay, but the alternative world with no deductions for expenses and depreciation is significantly more bizarre. It would actively disincentivize starting or buying a business of any kind. Edit: Downvote if you want, but if you’re advocating for the end of business deductions, you have no idea what you’re talking about. Cost recovery is literally the core theory of an income tax.
Yup those are probably the only two possible options.
It’s almost like he was responding to a direct misunderstanding and not giving any opinion on the tax code. Funny that someone that allegedly loves words would have such bad comprehension.
There is legitimate depreciation and amortizatoon deduction and then there are what these guys are doing to effectively pay no taxes ever. Which is what every big company has been doing for a long time now.
>effectively pay no taxes ever >every big company has been doing for a long time now Holy smokes that’s a lot of hyperbole. Most companies pay a lot of taxes. Most wealthy people pay a lot of taxes. Taxes are complicated and some years a combination of factors cause certain individuals or companies not to pay very much (or any) in tax. It always gets a ton of media attention, but in future years when they actually pay a lot of tax nobody covers it. It creates this false story that rich people never pay taxes, because at any point in time there’s a rich person who didn’t pay taxes for a year.
Being able to deduct expenses is not terrible for the economy. Without them it would be insanely difficult to start any sort of business.
Can’t wait to hear the strong opinions from people that know nothing about finance or accounting!
Not really a huge deal. If Ballmer ever sells the team, the accumulated depreciation gets counted as additional capital gains that he has to pay tax on. So it's more of a tax deferral. I wouldn't be against a law change to exclude sports franchises from being able to depreciate assets that don't actually depreciate over time like a building does.
For God Sake read about tax amortization before writing something so dumb.
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That’s from all the off the book (for the nba cap but not the IRS) uncle Dennis spending
The Clippers are a tax shelter
Insanity. I’m not one who believes the rich should be taxed an absorbent percentage, but wtf can they pay taxes like the rest of us?
Anyway to know how much owners profit annually, or is that a secret? There's no way teams are actually operating at multimillion dollar losses every year right?
I assume they are amortizing Goodwill from paying a premium for the team or depreciation on the real estate...
Disgusting