It's depreciation. That applies to any business investments really. You deduct the value of an asset over the life the the asset. It's not really tax avoidance as to depreciate something the business would have had to spend money on it in the first place, making it not part of their profit anyway. If they do make profit on something that depreciated, then you're required to pay depreciation recapture and repay the benefit of that deduction over time. Where it goes away entirely is something that depreciates to no value, so like for a regular business, a machine that is worn out and unserviceable after X years, or I guess for a sports business an athlete contract. They really aren't being straightforward with something like "There’s little risk that players will stop playing for Ballmer’s Clippers" because it would be tied to a player directly. Lebron will not play for the Lakers at the end of his contract, because he's no longer obligated to do so, such that the value of that contract is now zero. Any new contract would be a new depreciation line item. I don't know how you could possibly depreciate TV deals, as that's revenue. They don't go into any detail how.
The shortest answer though, is a lot of that depreciation Ballmer takes would have to be repaid in the event he sells the team (for a profit), particularly if taken on a whole on his personal income taxes. Yeah there's some loopholes, there are a ton of loopholes. I believe the biggest being inheritance, as a lot of it goes away when it becomes part of an estate.
I'd be a lot happier if articles like this would go into how broken taxes are on the middle class. They never do that because they need a class war, you're supposed to hate the rich. One personal example, I've done both mine and my mother's taxes for last year, and I pay nearly 10x the amount of federal tax than she does at just a little over 2x the income and I have little to no ability to exploit loopholes. Then there's the actual poor, that pay negative tax, meaning they get paid by the IRS for filing with all the credits.
What “there is little risk that players will stop playing for the Clippers” means is that it doesn’t matter who’s on contract, the simple fact that the Los Angeles Clippers are an active NBA team means that the value of said Clippers will continuously go up. In addition to this, the biggest thing for me is the fact that amortizing the cost of the time against the profits means that relatively newly bought/expanded teams are basically tax benefits.
I do think it’s relevant that the owners of the teams pay a smaller rate on more money than the players, like they said in the article, Lebron pays 39% on 35 million while Ballmer pays 12% on way more than that because of the ability to amortize the cost of the sale over that period of time.
Plus I don’t really think it’s a stretch to hate the rich, considering that the “you will own nothing and be happy” people, the Silicon Valley execs, all the people in charge of pushing the things that the people on this site hate, are the rich. There are very few rich people who openly identify with the GOP, at least publically anyway, plus it’s not like the rich aren’t the people bribing Congress through corporate lobbying to push legislation to favor them. But to be fair to you, that’s hating the actions of the rich for being evil pieces of shit, not what many leftists do and hate the rich for simply having that much money.
Forgot one thing, the depreciation/unpaid taxes that got amortized gets lumped in with the sale price of the team if the team ever gets sold, for the most part.
I didn’t click on the links within the article, but I probably should because that’s where a lot of explanations for statements tend to be, but I’ll do that once I’m clocked out.
It's depreciation. That applies to any business investments really. You deduct the value of an asset over the life the the asset. It's not really tax avoidance as to depreciate something the business would have had to spend money on it in the first place, making it not part of their profit anyway. If they do make profit on something that depreciated, then you're required to pay depreciation recapture and repay the benefit of that deduction over time. Where it goes away entirely is something that depreciates to no value, so like for a regular business, a machine that is worn out and unserviceable after X years, or I guess for a sports business an athlete contract. They really aren't being straightforward with something like "There’s little risk that players will stop playing for Ballmer’s Clippers" because it would be tied to a player directly. Lebron will not play for the Lakers at the end of his contract, because he's no longer obligated to do so, such that the value of that contract is now zero. Any new contract would be a new depreciation line item. I don't know how you could possibly depreciate TV deals, as that's revenue. They don't go into any detail how.
The shortest answer though, is a lot of that depreciation Ballmer takes would have to be repaid in the event he sells the team (for a profit), particularly if taken on a whole on his personal income taxes. Yeah there's some loopholes, there are a ton of loopholes. I believe the biggest being inheritance, as a lot of it goes away when it becomes part of an estate.
I'd be a lot happier if articles like this would go into how broken taxes are on the middle class. They never do that because they need a class war, you're supposed to hate the rich. One personal example, I've done both mine and my mother's taxes for last year, and I pay nearly 10x the amount of federal tax than she does at just a little over 2x the income and I have little to no ability to exploit loopholes. Then there's the actual poor, that pay negative tax, meaning they get paid by the IRS for filing with all the credits.
What “there is little risk that players will stop playing for the Clippers” means is that it doesn’t matter who’s on contract, the simple fact that the Los Angeles Clippers are an active NBA team means that the value of said Clippers will continuously go up. In addition to this, the biggest thing for me is the fact that amortizing the cost of the time against the profits means that relatively newly bought/expanded teams are basically tax benefits.
I do think it’s relevant that the owners of the teams pay a smaller rate on more money than the players, like they said in the article, Lebron pays 39% on 35 million while Ballmer pays 12% on way more than that because of the ability to amortize the cost of the sale over that period of time.
Plus I don’t really think it’s a stretch to hate the rich, considering that the “you will own nothing and be happy” people, the Silicon Valley execs, all the people in charge of pushing the things that the people on this site hate, are the rich. There are very few rich people who openly identify with the GOP, at least publically anyway, plus it’s not like the rich aren’t the people bribing Congress through corporate lobbying to push legislation to favor them. But to be fair to you, that’s hating the actions of the rich for being evil pieces of shit, not what many leftists do and hate the rich for simply having that much money.
Forgot one thing, the depreciation/unpaid taxes that got amortized gets lumped in with the sale price of the team if the team ever gets sold, for the most part.
I didn’t click on the links within the article, but I probably should because that’s where a lot of explanations for statements tend to be, but I’ll do that once I’m clocked out.