NCAA to allow players to profit off likeness

[floridajacket]

Mind is mush from looking into this, but it appears that:

1. Athletic scholarships are not treated differently. Room and board is taxable:

https://www.irs.gov/pub/irs-pdf/p970.pdf

2. But all of the room and board portion of scholarships are not taxable under FICA. With standard deductions, adding room and board to non-FICA taxable income results in minimal tax for most college students.

3. IRS specifically can tax the academic portion of scholarships if it's in exchange for a service. Grad schools got around this restriction by making grad students' teaching or research part of the curriculum. For athletes, the schools argued to IRS in 1977 that athletic scholarships do not in fact require athletic participation. The school will merely not renew for the next semester or year.

The scholarships today do in fact have language requiring athletes to participate in exchange for the scholarship. Since the IRS has not tried to collect the academic portion of athletic scholarships since 1977, universities have forgotten the tax implications.

http://www.taxhistory.org/www/features.nsf/Articles/0473CF3877C2DB9C85257E1B004D63C5?OpenDocument

 

[BeeStorm]

I'm about to fill your inbox with my "likeness." It'll be a kind of performance art; a digital recreation of my experience on the night of Wednesday, October 30th, 2019 with your mom.

actually, we had a stock photo of a colonoscopy so we won't need your likeness.

 

[GTCrew]

They're not taxed if they pay for tuition and mandatory fees. Any non-mandatory fees, including room and board and food, are taxed.

Taxing athletic scholarships is a ridiculous idea. Consider a school like Tulane. None of the players will receive endorsements, so 85 guys will end up taking out loans to cover their scholarship taxes. Even at a school like Alabama, maybe 10 guys will get endorsements, leaving 75 guys paying taxes for no reason.

Or you could comprehend the proposal before commenting.

He's proposing taxing scholarships only if you cash in on "your likeness". Nobody at Tulane will pay taxes on the scholarship if they dont take the likeness pay.

You can decide if you are an amateur college athlete and pay no taxes on your scholarship OR if you are a semi-pro who is making bank off of the situation. If you are making bank off of the situation then you probably should have to pay taxes.

I assume out-of-state semi-pro athletes will have to pay far more taxes than in-state. I doubt many kids are that saavy, but maybe some are and it might factor in to Ga recruits staying in state.

Math slightly helps states with no income tax also, granted thats awful minor.

 

[GTCrew]

I don't see anything stopping boosters from starting Speculative Signatures, LLC and throwing what they used to donate to the school in as an annual investment. Recruits get paid whatever it takes to get them to go to School X in exchange for a signed football. Sell or donate the footballs, write off the losses, and now you maintain your tax deductible donations but have a direct impact on the program, which is what they want in the first place.

I think this is going to have a big impact on donations to athletic associations and women's scholarships.

Yeah, this diverts a lot of money away from the AAs. Seems neutral to the NCAA. The proposal will indicate if the NCAA bureaucrats run college football alone or if the AAs run the NCAA.

 

[zippyGT]

Or you could comprehend the proposal before commenting.

He's proposing taxing scholarships only if you cash in on "your likeness". Nobody at Tulane will pay taxes on the scholarship if they dont take the likeness pay.

You can decide if you are an amateur college athlete and pay no taxes on your scholarship OR if you are a semi-pro who is making bank off of the situation. If you are making bank off of the situation then you probably should have to pay taxes.

I assume out-of-state semi-pro athletes will have to pay far more taxes than in-state. I doubt many kids are that saavy, but maybe some are and it might factor in to Ga recruits staying in state.

Math slightly helps states with no income tax also, granted thats awful minor.

If you decided to go "semi-pro," wouldn't tuition then become a business expense since you can't be semi-pro without paying tuition?

 

[GTCrew]

If you decided to go "semi-pro," wouldn't tuition then become a business expense since you can't be semi-pro without paying tuition?

Maybe, but wouldnt you have to incorporate?

 

[zippyGT]

Maybe, but wouldnt you have to incorporate?

Nah, you could form a sole proprietorship. If you're worried about getting sued, an LLC costs about $100 in the states I've worked in. I'm sure an agent would set it up and run the taxes for you.

 

[GTCrew]

Nah, you could form a sole proprietorship. If you're worried about getting sued, an LLC costs about $100 in the states I've worked in. I'm sure an agent would set it up and run the taxes for you.

Wonder what the tuition price would have to be to break even off the std deduction.

 

[Yukonwreck]

Would a more financially independent student athlete be more coachable, or less coachable? If Trevor Lawrence or Joe Burrow were banking, say, $60,000 per season, would they tune out the qb coach?