“How Recent IRS Changes Could Impact NFL Teams' Draft Strategies in Nashville,” Nashville Business Journal
In an article published on April 24 in the Nashville Business Journal, Josh Ehrenfeld and Nicole Keefe provide insight on how recent IRS changes may have an impact on NFL teams’ draft strategies. Miraculously, for those fans in need of a big trade, the IRS may have just played an unwitting part in helping to make those dreams a reality.
As the NFL Draft kicks off this week, fans are preparing mock drafts and are anticipating redefined rosters for the upcoming season with the hopes of acquiring first-round talent.
Rather unknown, professional sports teams have been required to recognize gains or losses with respect to a player contract or a draft pick if the value of that contract changed since the enactment of the Tax Cuts and Jobs Act.
“In other words, for the past year and a half, player and draft-pick trades have been taxable events,” Ehrenfeld and Keefe clarify.
Following the IRS Revenue Procedure 2019-18, just released on April 11, professional sports teams must obtain a safe harbor with respect to the value of a traded player, draft pick and even staff members. To put it simply, “the IRS has just confirmed that nearly all draft day trades are tax-free transactions.”
You may read the full article here.