Jimmer Trade Rumors

snoscythe wrote:

BlueIsBetter wrote:

snoscythe wrote:
Upshot is that Jimmer has been tremendously frugal post-BYU, and will not be hurting for funds and will be well set in the event hoops doesn't work out beyond the next couple of years.

Jimmer could play a decade in Europe and make $20 mil... he doesn't have to worry about cash, just where he's going to live and play hoops.

Yeah, but then he'd have to pay 80% of that in taxes. :bug:

Pretty sure USA is right there with most European countries as far as taxes are concerned.

http://money.cnn.com/interactive/pf/taxes/top-income-tax-rate/#" onclick="window.open(this.href);return false;

SEE YA SUCKERS!!!!



I'm Movin to Poland!

scott715 wrote:
No there are tax treaties, so you get a credit for foreign tax paid. However I am not a Tax Accountant.

This is essentially right. But the tax credit is limited so you end up paying the higher of the two rates (disregarding the foreign earned income exclusion, which, as suggested above, isn't that big a deal at high income levels). So if the foreign rate is 30% and the U.S. rate is 40%, he will pay 40% on a net basis. If the foreign rate is 45% and the U.S. rate is 40%, he will pay 45% on a net basis. No double tax.



Yes, I'm a tax accountant.

SpoCoug wrote:

No there are tax treaties, so you get a credit for foreign tax paid. However I am not a Tax Accountant.

This is essentially right. But the tax credit is limited so you end up paying the higher of the two rates (disregarding the foreign earned income exclusion, which, as suggested above, isn't that big a deal at high income levels). So if the foreign rate is 30% and the U.S. rate is 40%, he will pay 40% on a net basis. If the foreign rate is 45% and the U.S. rate is 40%, he will pay 45% on a net basis. No double tax.



Yes, I'm a tax accountant.

And if he played in France? :sick:

imuakahuku wrote:

scott715 wrote:
No there are tax treaties, so you get a credit for foreign tax paid. However I am not a Tax Accountant.

This is essentially right. But the tax credit is limited so you end up paying the higher of the two rates (disregarding the foreign earned income exclusion, which, as suggested above, isn't that big a deal at high income levels). So if the foreign rate is 30% and the U.S. rate is 40%, he will pay 40% on a net basis. If the foreign rate is 45% and the U.S. rate is 40%, he will pay 45% on a net basis. No double tax.



Yes, I'm a tax accountant.

And if he played in France? :sick:

Looks like France is backing away from the ledge, slowly.

http://espnfc.com/news/story/_/id/1627780/french-75-tax-rate-proposal-rejected?cc=5901" onclick="window.open(this.href);return false;

So, I don't get it. If person A was to pay 45% taxes in England for example, and made $2 million dollars, then what would they owe the US?

BlueIsBetter wrote:
So, I don't get it. If person A was to pay 45% taxes in England for example, and made $2 million dollars, then what would they owe the US?

If he made all his money in England, he'd pay $900K to England and zero to the U.S. (U.S.tax liability of approx. $800K would be completely offset by the foreign tax credit).



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So how does it work if Jimmer gets traded from Sac town to say Houston where there's no state income tax. Jimmer pays 10% in Cali and 0% in Texas so how is that broken down if he shares both states? That's a fairly significant chunk of change for someone making 2-3 mill+ a year. And what if he has a permanent residence elsewhere.

craigoscarson wrote:
So how does it work if Jimmer gets traded from Sac town to say Houston where there's no state income tax. Jimmer pays 10% in Cali and 0% in Texas so how is that broken down if he shares both states? That's a fairly significant chunk of change for someone making 2-3 mill+ a year. And what if he has a permanent residence elsewhere.

Having just been through that - different states



Hawaii taxed what I made prior to moving to Nevada in March 2012

Nevada does not tax income

I moved to California in January 2013, but had I moved there in say - October, 2012, they would have taxed income earned after that.



Similarly. I have had rental income from Utah and California for decades and recently added Nevada - but lived in Utah, California, Illinois, and Hawaii over the years including multiple stints in each state, except Hawaii which was 1 long stint.



Each year I filed returns for each state with rental income plus whichever state or states I lived in that year. The rental income is tied to where the rental property is regardless of where you live. My regular job income was tied to where it was earned which was also where I lived.



IDK if there is a way to claim permanent residence in one state and work as an employee in another and how that would be taxed. It must happen all the time for people that live near a state border ie live in KC Kansas and work in KC Missouri. Or live in St. George Utah and work in Mesquite, NV.



Being an independent contractor living in Utah and working around the country would be taxed in Utah.



That is how I understand it.



Speaking of Tax Experts, my son graduates in August with a BS in Acctg, Masters in Accounting with tax emphasis, and a JD all from BYU. He has a solid offer from one of the large international accounting firms. Anyone having any contacts that could help him land a job with a good law firm - preferably in the west - but he would relocate wherever needed for a tax or transactional opportunity with a good firm - please let me know. he is in about the Top 15% of his Law Class. He would even commit to completing an advanced tax LLM program at NYU or Florida if a firm sponsored him.

So is it prorated for the amount of time you lived there? If Jimmer is in Cali half the season and in Texas the other half does he only pay state income on the time he was in California?



(If you substitute my wife for Jimmer you'll understand why I ask.. she cleared over 300k this year, we have a permanent home in Kansas City and just recently moved to Fresno (where we purposely rented this year and never sold our home in KC) when school started for my daughter... but her pay is all commission based so taxes weren't paid into and the 1099 is going to our permanent home in Kansas City.. seems to me like there's a valid argument to make for not paying California income tax for her, in spite of the fact that I worked here and have to... and then what do you do with the commission that I earned by being part of her downline (I didn't work the biz but she built under me but I only cleared about 50k from her biz) due to the fact that it's abundantly clear that I was working in California most of this year..)



The answer to that question could save or cost me tens of thousands on $$... so thanks to whomever started this discussion on $$ and taxes (though obviously we were going to retain a good accountant prior to April.. I hired one in Fresno last year but they didn't impress me at all and our taxes were much easier then because 2012 all happened in Kansas City)

I believe basketball players (and all athletes) pay taxes in every state where they play. That's where they fulfill their contracts.



Half in their home state (home games) and half in the other venues where they play.My understanding is that it is on a pro-rated basis for the number of games played in a given state. For Jimmer, that would amount to more than half in CA, since the games in LA and Oakland also count, but he'll also file in TX and won't pay state income tax for the games vs San Antonio, Houston, and Dallas. That's why players balk about Toroto where tax rates are higher for the 50% of their games played at home. Not sure how playoff games figure into the tax liability mix.



Ironically, they don't balk about CA or NY where tax rates are high, but I'm guessing there are more benefits to living in Los Angeles or Manhattan than Toronto (I'm thinking endorsements mostly, because Toronto is a pretty cool city IMHO).



CraigO - I am not sure how or whether commissions differ from contract pay. I am not a tax professional, but I did stay at a Holiday Inn Express recently. FWIW.

CraigO find your tax accountant now. You could have some tax moves that have to be made this year. There is no reason to wait. I temp at a firm but I don't think they would be best for you.

craigoscarson wrote:
So is it prorated for the amount of time you lived there? If Jimmer is in Cali half the season and in Texas the other half does he only pay state income on the time he was in California?



(If you substitute my wife for Jimmer you'll understand why I ask.. she cleared over 300k this year, we have a permanent home in Kansas City and just recently moved to Fresno (where we purposely rented this year and never sold our home in KC) when school started for my daughter... but her pay is all commission based so taxes weren't paid into and the 1099 is going to our permanent home in Kansas City.. seems to me like there's a valid argument to make for not paying California income tax for her, in spite of the fact that I worked here and have to... and then what do you do with the commission that I earned by being part of her downline (I didn't work the biz but she built under me but I only cleared about 50k from her biz) due to the fact that it's abundantly clear that I was working in California most of this year..)



The answer to that question could save or cost me tens of thousands on $$... so thanks to whomever started this discussion on $$ and taxes (though obviously we were going to retain a good accountant prior to April.. I hired one in Fresno last year but they didn't impress me at all and our taxes were much easier then because 2012 all happened in Kansas City)

The sooner you get a tax attorney the better - may be too late.



California is probably the most aggressive state in the 50 states for disputing which state prevails. They come after you aggressively. And your federal return tips them off to existence of other income. I heard one tax advisor call it audit roulette. Roll of the dice re getting audited.



The key for salaried people is where your primary residence is. Keeping a house in KC does not make it your primary residence. Where you work, get paid, register to vote, register your car, get your driver's license, etc., all are points California will argue. Where you spend most of your days and nights. Salaried people are not pro-rated, it cuts by the date you changed addresses and whether the money was earned before or after that date. Delaying payment of the money will get challenged - earned vs paid.



Your wife's business is more complicated. Is it incorporated and if so, where? If so, how much is corporate earnings vs salary and bonus paid to her. If not incorporated, where the business is domiciled and how and when she takes money out probably matter. I am not in this situation exactly, so I would be guessing on some specifics.



Some states are not very aggressive about this stuff. California is.



Discuss with a tax attorney under attorney client privilege would be my suggestion. An ounce of planning could be worth a ton of cure.



I am not a tax expert, but I did recently go through this exercise with one. I am very fortunate that I talked to one before I moved to California. It would have been a disaster if I had moved there in 2012.



I am ok living here now, because I am retired, and capital gains and 401K sheltered earnings provide some relief.

HoosierCougar wrote:
I believe basketball players (and all athletes) pay taxes in every state where they play. That's where they fulfill their contracts.



Half in their home state (home games) and half in the other venues where they play.My understanding is that it is on a pro-rated basis for the number of games played in a given state. For Jimmer, that would amount to more than half in CA, since the games in LA and Oakland also count, but he'll also file in TX and won't pay state income tax for the games vs San Antonio, Houston, and Dallas. That's why players balk about Toroto where tax rates are higher for the 50% of their games played at home. Not sure how playoff games figure into the tax liability mix.



Ironically, they don't balk about CA or NY where tax rates are high, but I'm guessing there are more benefits to living in Los Angeles or Manhattan than Toronto (I'm thinking endorsements mostly, because Toronto is a pretty cool city IMHO).



CraigO - I am not sure how or whether commissions differ from contract pay. I am not a tax professional, but I did stay at a Holiday Inn Express recently. FWIW.

Idk if there is some stipulation unique to professional athletes, but this does not sound right unless there is one. I have worked for companies that sent me to other states frequently on business trips and even to foreign countries. But I was paid by my employer in my normal paycheck with normal deductions.



Now re commissions and bonuses. If you are an employee vs a contractor, salary, commissions, and bonuses all end up on your W2 at the end of the year and are taxed the same as your salary. So all of the same primary residence stuff applies. An aggressive state may challenge when an annual bonus paid in March was actually earned as the bonus may be considered to have been earned the prior year. Anyway - not a tax expert and did not even stay at The Holiday Inn.

PS



Athletes may earn as much or more in endorsements as salary. Stockton and Malone had car dealerships. Business structure, residency, and how and when money is earned or taken out probably matter here, too.



But California does not get anything from my rental income in Utah and Nevada. Unfortunately, most of my rental income is from Orange County and Cal takes a huge chunk of that every year.



Hawaii tried to go after me for the rental income - seeing it on my federal return, and I had to prove to them that the rentals were not in Hawaii. Iirc, there is a special tax on rental properties there - maybe specific to short-term rentals to protect the hotel industry re vacation rentals. Any way, they backed off after I provided documentation.

craigoscarson wrote:
So how does it work if Jimmer gets traded from Sac town to say Houston where there's no state income tax. Jimmer pays 10% in Cali and 0% in Texas so how is that broken down if he shares both states? That's a fairly significant chunk of change for someone making 2-3 mill+ a year. And what if he has a permanent residence elsewhere.

Professional sports teams didn't like how much state tax concerns were playing a factor in free agency decisions, so every state that hosts major professional sports teams will now assess taxes based on a per game basis--if you're in the NFL they break your salary into 16 pieces and you pay tax on each piece depending on where the game was played--so you can have up to 9 separate state tax returns if you're in the NFL.....many more if you are in the NBA or MLB. That way the home tax advantage is cut in half.

That's the law but it is stupid. The state only gets half of the local team players income. It just complicates things with no extra income.

scott715 wrote:
That's the law but it is stupid. The state only gets half of the local team players income. It just complicates things with no extra income.

That's why the Fed and States were okay with it. The leagues wanted it to reduce the advantage Texas, Florida and other states with no state income tax had. The advantage those teams had is now half what it used to be, and the states/fed still collect roughly the same tax bill, so no skin off their back.

scott715 wrote:
That's the law but it is stupid. The state only gets half of the local team players income. It just complicates things with no extra income.

Probably revenue neutral.Allows the expensive states to shift the burden partly to the out of staters. If this is how it works, The Black Mamba - Kobe Bryant gets a tax break at the expense of visiting players with the Dallas Mavericks who live and are employed in Texas where there normally is no state income tax, but find themselves paying 11% when they play the Lakers or the Clippers or SAC, or Golden State.



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snoscythe wrote:

That's the law but it is stupid. The state only gets half of the local team players income. It just complicates things with no extra income.

That's why the Fed and States were okay with it. The leagues wanted it to reduce the advantage Texas, Florida and other states with no state income tax had. The advantage those teams had is now half what it used to be, and the states/fed still collect roughly the same tax bill, so no skin off their back.

Not sure if JV QB is following this - just 1 more example that every sport at every level tries to create parity. Otherwise fans disengage.



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Residency is critical. If Jimmer is a CA resident for the entire year, CA would initially tax ALL of his income but then he would get a credit for taxes paid to other states (similar to the foreign tax credit) to avoid double state tax. So if he played half his games in CA and half his games in TX, he would still pay CA tax on his entire salary (no credit for taxes paid to TX since none paid).



If he played half his games in CA and half in TX and were a TX resident, CA would tax half of his earnings and TX would tax none.



If you are a resident of one state for part of the year and a resident of another state for part of the year, then you will generally pay taxes to each state based on where you earned your income, potentially receiving credits for taxes paid to other states where you were not a resident.