If you are a player that has NIL value do you want "things" or money?

[blion72]

this is the same type of thing every company deals with when compensating employees = money, benefits or perks. they all wind up with the taxman getting their piece. The problem many employees get into is realizing too late that they pay tax from the cash side, so if your benefit/perk side gets too big it can give you a negative surprise in April. some startup companies that folded have left their former employees with big tax bills over stock and option awards - and no income to pay tax.

we hear things like "bags of cash" going to a player, which of course would be illegal - federal tax evasion and racketeering not good. I think they mean bags of cash that are money that will be a 1099 on a tax return by the player. if a player gets a $80,000 truck and $20k of cash income, that is $100k taxable - they would not have enough cash to pay their tax bill.

wouldn't it be smart to just take all money? you can buy a car on your own.

 

[CDLionFL]

Just pay me like I’m an employee (and really, they kinda are) and tax it like you do every other employee’s paycheck.

 

[marshall23]

both

 

[Nitt1300]

 

[psuro]

OP has been oddly obsessed with the tax implications of NIL since it's inception.

Real weird stuff, dude.

 

[Thorndike2021]

I think revenue sharing and incentive-based payments (wins, making a bowl game, making the play off, etc.) make the most sense.

 

[GrimReaper]

this is the same type of thing every company deals with when compensating employees = money, benefits or perks. they all wind up with the taxman getting their piece. The problem many employees get into is realizing too late that they pay tax from the cash side, so if your benefit/perk side gets too big it can give you a negative surprise in April. some startup companies that folded have left their former employees with big tax bills over stock and option awards - and no income to pay tax.

we hear things like "bags of cash" going to a player, which of course would be illegal - federal tax evasion and racketeering not good. I think they mean bags of cash that are money that will be a 1099 on a tax return by the player. if a player gets a $80,000 truck and $20k of cash income, that is $100k taxable - they would not have enough cash to pay their tax bill.

wouldn't it be smart to just take all money? you can buy a car on your own.

Most athletes who "receive" automobiles don't get title to the vehicle itself, but rather use of it for a finite period of time. Value is akin to a lease making tax consequences far less costly.

 

[blion72]

Most athletes who "receive" automobiles don't get title to the vehicle itself, but rather use of it for a finite period of time. Value is akin to a lease making tax consequences far less costly.

I know we have seen that approach with the guys doing the car ads like Ewers in Columbus with the Ford truck. that would make sense as there is a tie to the dealer.

In the case where there is no connection to the dealer for the NIL ad work, it seems more complicated. Are these "collectives" setup to lease vehicles either from dealer or buy them and provide to player without charge and then create imputed income? It would seem to require the collectives to operate with all the function of a sports management firm. it also seems like it would invite the IRS to be all over you, and much easier than just paying $$$ and send a 1099 to player. Rumor was that Penix was offered a house near UW - how complicated is that.

The IRS is targeting upper middle class small business people for audits - and these collectives and players would seem to be a good target. IRS could show some muscle - tax recovery, fines and some prison sentences.

 

[Mr. Potter]

Its all for the Money.

 

[WVilleLion23]

Most of these players are being directed to the on campus law schools or other legal places where they can obtain legal/tax advice. I imagine there will be players that don’t listen or decide to do things on their own/under table that will end up with some issues. However, not like the players are having to figure it out all on their own at most schools.

 

[MtNittany]

Not sure. It is nice to see that Blaise Alexander and Julian Fleming seem to have an agreement though.

 

[GrimReaper]

I know we have seen that approach with the guys doing the car ads like Ewers in Columbus with the Ford truck. that would make sense as there is a tie to the dealer.

In the case where there is no connection to the dealer for the NIL ad work, it seems more complicated. Are these "collectives" setup to lease vehicles either from dealer or buy them and provide to player without charge and then create imputed income? It would seem to require the collectives to operate with all the function of a sports management firm. it also seems like it would invite the IRS to be all over you, and much easier than just paying $$$ and send a 1099 to player. Rumor was that Penix was offered a house near UW - how complicated is that.

The IRS is targeting upper middle class small business people for audits - and these collectives and players would seem to be a good target. IRS could show some muscle - tax recovery, fines and some prison sentences.

Where a collective is involved in setting up car deals they are more than likely acting as middlemen. I doubt they are pooling funds to create leases, nor would I expect lease finance companies to readily accept their credit.

 

[blion72]

OP has been oddly obsessed with the tax implications of NIL since it's inception.

Real weird stuff, dude.

I have reason for this, as the company I am part of has been audited many times by the IRS and the smallest items were turned into mountains by the agents. We got rid of any company cars and went to pure mileage reimbursement with electronic calculation for mileage - which penalizes employees who have to travel longer than Google maps says the distance was. The IRS is very aggressive with the small business where owners are upper middle class. The players are now upper middle class incomes and maybe even top 1% earners. the collectives have to operate under the same laws as we all do.

last year my wife and I attended a high school meeting for athletes as a career advisors - helping them realize that they all are not NFL, NBA, etc and need a career in the real world. one of the players said he would be able to live the rest of his life without working, and just live off of his NIL $$$. he had never held a job and did not understand taxes. He was shocked and thought it was robbery that he may lose nearly 40% the money to taxes. He didn't realize lottery winners paid taxes. There just seems too be a misunderstanding the laws including tax law. I am surprised we have not already heard of some major tax busts happening. IRS agents hauling off members of a collective or a player in handcuffs would make news and show the IRS means business.

 

[Bison13]

 

[leinbacker]

Can’t management just tell the players they had a good year and tell them there is pizza in the break room?

 

[Hugh Laurie]

Show me the money

 

[LionJim]

Yes.

 

[BobPSU92]

If you’re a ”student”-athlete, hit the books hard, keep your head down, and STFU.

 

[PSU73]

A friend just asked an interesting side question:
do groupies take NIL into consideration for their choices?

 

[mfb5053]

When’s the end zone getting into the NIL game?

 

[ChandlerPearce]

I have reason for this, as the company I am part of has been audited many times by the IRS and the smallest items were turned into mountains by the agents. We got rid of any company cars and went to pure mileage reimbursement with electronic calculation for mileage - which penalizes employees who have to travel longer than Google maps says the distance was. The IRS is very aggressive with the small business where owners are upper middle class. The players are now upper middle class incomes and maybe even top 1% earners. the collectives have to operate under the same laws as we all do.

last year my wife and I attended a high school meeting for athletes as a career advisors - helping them realize that they all are not NFL, NBA, etc and need a career in the real world. one of the players said he would be able to live the rest of his life without working, and just live off of his NIL $$$. he had never held a job and did not understand taxes. He was shocked and thought it was robbery that he may lose nearly 40% the money to taxes. He didn't realize lottery winners paid taxes. There just seems too be a misunderstanding the laws including tax law. I am surprised we have not already heard of some major tax busts happening. IRS agents hauling off members of a collective or a player in handcuffs would make news and show the IRS means business.

Not just players....as most every social assistance program has an income component. So depending on the NIL value and the families circumstances it very well could eliminate qualifying for some assistance programs.

 

[Catch1lion]

A friend just asked an interesting side question:
do groupies take NIL into consideration for their choices?

Hold on caller, we have Elijah Pitchett on line two .

 

[Blair10]

this is the same type of thing every company deals with when compensating employees = money, benefits or perks. they all wind up with the taxman getting their piece. The problem many employees get into is realizing too late that they pay tax from the cash side, so if your benefit/perk side gets too big it can give you a negative surprise in April. some startup companies that folded have left their former employees with big tax bills over stock and option awards - and no income to pay tax.

we hear things like "bags of cash" going to a player, which of course would be illegal - federal tax evasion and racketeering not good. I think they mean bags of cash that are money that will be a 1099 on a tax return by the player. if a player gets a $80,000 truck and $20k of cash income, that is $100k taxable - they would not have enough cash to pay their tax bill.

wouldn't it be smart to just take all money? you can buy a car on your own.

Lots of questionable assumptions are being made in some of your statements. Unless you have first hand inside information, you don’t know if a player lacks the cash to pay their tax bills.

Also, the question you pose can result in an answer based on individual preference. So, there is no right or wrong answer. Some life choice decisions are intentionally not based on tax consequences.

Lastly, I find it amazing how entitled and greedy some people can be regarding their complaints about paying taxes on stock option awards. Would they prefer to have zero stock options? I doubt it.

 

[laKavosiey-st lion]

I for one do complain about paying taxes on stock awards.

 

[troutrus]

I never received anything for my NIL, but if I did I would ALWAYS prefer CASH.

 

[Anon1703423479]

A friend just asked an interesting side question:
do groupies take NIL into consideration for their choices?

There’s the groupie and then there’s the player who accepts the groupie’s affections. If we are speaking pejoratively, both persons should be included. What might be considered poor behavior is not the groupie’s exclusively. I advocate for women, always.

Is Travis Kelce a groupie? Maybe a groupie who’s transitioned to boyfriend? I know he’s wealthy but there’s wealthy and there’s incredibly wealthy like TS. But then Travis is a guy so it’s okay.

 

[PSU1969A]

Cash, any other type of renumeration like cars, etc. are taxable. A 80K car has the same tax burden as 80K cash.

 

[EricStratton-RushChairman]

 

[Tom_PSU]

View attachment 490316

This is a much better question. Cocaine or hookers, choose the cocaine. That way you can get as many hookers as you want as long as you have cocaine. Now if you don’t have money or cocaine, you’re really fuc$ed, which really doesn’t make any sense.

 

[CbusLion]