Trump tax overhaul upends pro athlete ‘marketability’
In an effort to stretch the U.S. revenue base under the Tax Cuts and Jobs Act, the GOP repealed a provision that alters the way professional sports franchises are taxed on player trades.
Previously, the Internal Revenue Service (IRS) had allowed players to be considered “like-kind property,” or two assets classified as a similar type, not necessarily the same quality. This classification allowed them to defer capital gains taxes because they were reinvesting profits into a similar “property” by acquiring another player. The provision, as a whole, applied to some real estate, manufacturing equipment and business exchanges.
But the Tax Cuts and Jobs Act repealed “like-kind” property provisions for all exchanges except real property, as first reported by The New York Times. That has put professional sports teams, in particular, in a tricky situation.
“It certainly has the potential to have a significant impact in the sense that if movements of players … that have value between teams are potentially subject to the capital gains tax, that could represent a significant impact on the marketability of players,” Dr. Stefan Szymanski, professor of sports management at the University of Michigan, told FOX Business.
Read the full article in Fox Business by Brittany De Lea here: https://www.foxbusiness.com/features/trump-tax-overhaul-upends-pro-athlete-marketability