We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Revenue Procedure 2019-18: The IRS Been "Berry, Berry Good" to Baseball and Other Sports Team Owners in Taxing Player Contract Trades.
- Authors
Shechtman, David; Meltzer, Matthew J.
- Abstract
More than 50 years ago, the IRS confi rmed that trades of contracts for professional sports players qualifi ed as like-kind exchanges under Section 1031, thus enabling team owners to avoid recognizing gain or loss on such trades unless cash also changed hands. The playing fi eld changed, however, for trades commenced after December 31, 2017, because the Tax Cuts and Jobs Act limited non-recognition treatment to exchanges of real property only. In Revenue Procedure 2019-18 the IRS introduced, as a rule of administrative convenience, a "safe harbor" under which sports franchises may value player contracts (including draft picks) acquired in a trade at "zero value" for determining gain or loss under the general principles of Section 1001. This article reviews existing guidance for determining adjusted basis in a player contract, including the amortization rules under Section 167 and Section 197; the implications of Revenue Procedure 2019-18; and the limitations on using the "zero value" safe harbor.
- Subjects
PROFESSIONAL sports contracts; SPORTS teams; SPORTS franchises; DELEGATED legislation; SAFE harbor
- Publication
Journal of Taxation of Investments, 2019, Vol 36, Issue 4, p55
- ISSN
0747-9115
- Publication type
Article