NIL taxable as income?

#26
#26
Remy said:
If it's income the IRS will tax it. However in the case of Nico if he changes and earns his NIL in Tennessee he will not have to pay those high state of Cali income taxes. But it can be tricky and depends where and how the payout occurs for instance, states like New York and Cali go after professional athletes on out of state teams if they play a game in those states and the payout is structured on a per game basis, then those states want their share of that. A good tax attorney and agent can make a big difference. For instance the Atlanta Braves player on their World Series team recently went to the West coast for "more money " and got there and after state and local taxes got through with him, found out he actually took a pay cut to a team he didn't like all that much. It was reported he cried on his first trip back to the ATL with his new team. The devil IS in the details.
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If CA deems Nico a CA resident they will tax all his earnings no matter where he earns it. If I were Nico, I would change my residence to TN before the contract takes effect. As long as he is a TN resident and the NIL contract doesn't say he has to play in games to earn the $ (which I believe would be a NCAA violation) then I would expect his Spyre NIL deal would be sourced to TN. But it could get tricky if part of his deal requires out-of-state "appearances". Maybe he has to sign autographs or do a meet and greet with alumni groups after each road game? My understanding though is that the NIL deals are structured to keep all the appearances close to Knoxville so that it would make it extremely difficult to leave the Vols without beaching the contract.
 
#27
#27
Not a state issue but a few years ago when a certain US golfer won the Canadian Open, Canada would not allow his payment until ALL applicable Canadian taxes/fees were first deducted (which was a huge chunk of his winnings). I'd imagine (as far more knowledgeable ones have said) if a state like California can figure a way to money grab taxes from the NIL issue...they will! One reason (among others) why people and businesses are fleeing that state like rats jumping from a sinking ship.
 
#29
#29
tennrich1 said:
Not a state issue but a few years ago when a certain US golfer won the Canadian Open, Canada would not allow his payment until ALL applicable Canadian taxes/fees were first deducted (which was a huge chunk of his winnings).
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Canada is nothing. I had a golf client that finished in the money in a tourny in Costa Rica. It wasn't a lot of $ we were talking about but he wanted to know it was done correctly so he wouldn't be "detained" when he went back in future years. Obviously, the entire form is in Spanish, priced in Colóns, and had to be completed by hand. It took a week to figure out how to make the payment as we couldn't just mail them a US check.
 
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#30
#30
Heard on the radio that the athletes have the Tax taken out before they get it. So they just have to file a return to possibly get a refund.
 
#31
#31
37620VOL said:
Canada is nothing. I had a golf client that finished in the money in a tourny in Costa Rica. It wasn't a lot of $ we were talking about but he wanted to know it was done correctly so he wouldn't be "detained" when he went back in future years. Obviously, the entire form is in Spanish, priced in Colóns, and had to be completed by hand. It took a week to figure out how to make the payment as we couldn't just mail them a US check.
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Wow! I bet that was an absolute nightmare. The Canadian thing was told to me by his uncle who handles his finances. It's been a while, but I THINK he told me when all was said and done....Canada took like 60% of his earnings. I never ask but was wondering how that would affect his federal IRS taxation as well.
 
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#33
#33
CTM said:
Heard on the radio that the athletes have the Tax taken out before they get it. So they just have to file a return to possibly get a refund.
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That would normally indicate treatment as an employee, which would surprise me in this situation.

37620VOL said:
If CA deems Nico a CA resident they will tax all his earnings no matter where he earns it. If I were Nico, I would change my residence to TN before the contract takes effect. As long as he is a TN resident and the NIL contract doesn't say he has to play in games to earn the $ (which I believe would be a NCAA violation) then I would expect his Spyre NIL deal would be sourced to TN. But it could get tricky if part of his deal requires out-of-state "appearances". Maybe he has to sign autographs or do a meet and greet with alumni groups after each road game? My understanding though is that the NIL deals are structured to keep all the appearances close to Knoxville so that it would make it extremely difficult to leave the Vols without beaching the contract.
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CA FTB is about as aggressive as it gets.
 
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