All that NIL money going to tats and weed…
Or maybe some of these kids are more mature than the people whining about them.
All that NIL money going to tats and weed…
Looks like a trend is being made in the #NIL culture. This is awesome. pic.twitter.com/4NPmbiY3VI
— CFB Home (@CFBHome) July 3, 2021
Or maybe some of these kids are more mature than the people whining about them.
Filed under It's Just Bidness
“We remember the Sugar Bowl, I think it my junior year of high school, we let Alabama beat us twice,” Brinson said of a team that also lost to the Crimson Tide in the SEC Championship game. “We’re not letting Alabama beat us twice. In the Sugar Bowl in 2018, they… thought they should have been in the playoffs and lost to Texas.” -- AB-H, 12/27/23
As a CPA who Couldn’t Pass Again, how are the tax effects of these voluntary pooling arrangements going to work? The athlete who is paid is the one who will be ultimately responsible for the tax. If he voluntarily redistributes a portion of the money, he better have a good accountant telling him how much he can distribute without kicking into gift tax reporting on top of the income tax liability. When they have a team wide event, how does the income get distributed and who’s responsible? Here comes a big lesson on adulting, gentlemen. The IRS (and state revenue departments) don’t take the approach that ignorance of the law is an excuse.
The universities would be wise to get someone from their tax accounting faculty to provide some advice and guidance to the players who benefit from this.
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Very good points. I don’t believe giving away money to your buddies is tax deductible. So Mr King could be liable for the taxes on the entire amount received and his share might not cover the taxes owed. He could end up losing money. All that would need to be figured out in advance. Maybe Mr King could form a PC and say the monies given to other players were legitimate tax deductible expenses which were paid in order to build his brand.
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King would definitely be liable for the taxes. If the IRS wanted to go after any payments to teammates as business expenses to build his brand, he probably wouldn’t have a leg to stand on and would probably then put his teammates on notice with the IRS if it wasn’t reported because they would probably consider that to be income.
All of this is great in principle, but the implementation is a field of land mines.
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I must be missing something here. If it’s a team NIL function with the proceeds distributed to the participants, why would he liable for all the taxes?
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If it’s a team NIL function, wouldn’t the money go to the school? Why would they give the players any of it? I guess the players could negotiate a cut for themselves. Is that how it would work?
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“Team” in the sense of teammates, not the school.
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If King gives the money to teammates and does not also give them a 1099 form and declare the payments as some sort of business expense he will be liable for all the taxes on the NIL income. King can “gift” up to $15,000 to a teammate and the teammate will not have to pay tax on the money but King will still have to pay tax on the money.
The NIL money is income to King and he will have to report it on his tax return if his total income is over $12,400 for the year from all sources.
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But he wouldn’t be doing that in a joint setting, would he? They’d be earning the money together.
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I took it as more that he was going to “share” his NIL money with his teammates.
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Interesting interpretation, since he never uses that word.
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If he’s suggesting a team function, then the question would be how are the proceeds going to be distributed (and the tax liability going along with it).
I was only responding to Gurkha’s comment rather than what King was actually talking about.
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Again, maybe I’m missing something, but “team NIL function” and “split evenly the $$” seem pretty clear to me.
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I assume you know how a partnership works from a tax standpoint. Who’s going to form the partnership and send out the K-1s? My point is this is a hell of a lot more complex than we’re going to do this event and split up the money equally.
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Don’t you figure that someone who’s already launched this has done his due diligence?
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I assume so. All I would say is to dismiss those concerns is for these guys to do it at their own peril.
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The only thing I assume at this point is that those who are smart enough to ask for help will get it.
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Looks like an opportunity for some nice fees for you ee. I’m sure a sharp CPA like you could figure out a way to convince Uncle Sam the payments were legitimate business expenses. For the right fee of course. Hell my CPA would figure out a way for me to “lose money” (wink) on the whole thing so I could write off the loss against other income.
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He’d have to pay the tax if he spent the cash on tats. Or lost it all speculating in the stock market.
If only people had the same level of concern about billionaires cheating on taxes as we appear to have about poor athletes of color, the world would be a better place.
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I have no idea what you’re talking about. I want these guys to get good advice. I’m one who has supported NLI pretty much from the beginning of all of this.
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I think it’s a wonderful example of unselfishness. This kid has a heart of gold. Hopefully, someone has looked into the tax ramifications should he make a lot of money. I’m not sure just how much he’s really going to make, though.
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I agree with you. Those who end up making more than the standard deduction and the personal exemption will likely be few and far between (at least in my opinion). I would hate to see a young man make a great personal decision to share a portion of what he earns with his teammates but then scramble to pay his taxes.
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Good intentions. Based on previous tweets King has not followed thru on previous commitments-
https://www.google.com/amp/s/www.dallasnews.com/sports/tcu-horned-frogs/2016/02/03/one-time-tcu-commit-d-eriq-king-signs-with-houston/%3foutputType=amp
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“The road to Hell is paved with good intentions.”
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Give Mr. King a list of bills that require payment to moms house so the student athletes can keep their stipend checks and everybody is good…this is better than the NIL rain making that ensued after the lsu title game…or maybe it was innocent “make it rain” stripper monies…
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Soon to be 24, he ain’t a “kid” either.
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Damn, that means King is as untrustworthy as Jake Fromm, who didn’t honor his commitment to Alabama, and Roquan Smith, who didn’t honor his commitment to UCLA, and George Pickens, who didn’t honor his commitment to Auburn.
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I say share with the coaches for their efforts and boosters who provide the funds for the training and fields etc. And, of course, the exposure nationally on the networks needs to be accounted for like they do in NASCAR, and a portion reimbursed.
Then, obviously, there are obligations, as an adult, to reimburse for room and board at mommas!
Or should these young men learn a lesson, and just sign 50% over to their significant other up front?
😁😁😁
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When coaches remit money to the donors who funded their huge salaries maybe the players will. I suspect that the players will follow the examples of their coaches, administrative staff and university presidents and share their money using the same percentages their mentors do.
Seems King and Smith are more generous than their role models.
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Just make sure you are consistent when the dumbasses that do screw it up hit the news cycle.
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I would be Congress will give athlete’s NIL income special tax consideration before they givethe NCAA their anti-trust exemption.
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Why is this being heralded as the answer to a problem that only exists in the minds of the “Jealous”?
(CMR’s sharing his bonus with his un-bonused coaching staff members comes to mind as a comparison)
While I think it’s nice and I do salute King (this is genius on a few levels) if he and a few others publicize this as their intent and policy, it’s going to put some pressure on some that might not wish to do be so generous.
King can give every penny of his college NIL money away and still see wealth in his near future.
A lot of kids can’t.
Yet,they may feel pressured to share what they do get.
And they may say “no”.
That’s their prerogative but it may cause some pain.
I don’t think there is a right or wrong here. Everyone has to do what he feels led to do. But there’s a lot of good and possibly some not so good potential to it all.
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But I do think everyone owns their NIL and has the absolute right to use it as they want to.
Good on D’Eric King!
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If he’s literally willing to put his money where his mouth is, you gotta respect that.
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While a nice sentiment, what he said leads to huge complications.
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