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Post by wcsoxfan on Dec 14, 2023 11:03:15 GMT -5
What would "opting out" mean after, say, year four of this deal? He'll have banked $8 million and would be leaving $692 million on the table? Or he would still receive 4/10ths of the deferred cash? The deferred money is guaranteed once it has been earned. The funds are verified 4x a year before being dispersed.
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Post by philsbosoxfan on Dec 14, 2023 12:25:59 GMT -5
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Post by okin15 on Dec 14, 2023 15:37:35 GMT -5
I hope there's fun stuff that's not ruled out in there like Ohtani being able to buy Friedman off to allow him to take a new contract. Can players be charged with tampering?
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Post by foreverred9 on Dec 14, 2023 20:24:03 GMT -5
What would "opting out" mean after, say, year four of this deal? He'll have banked $8 million and would be leaving $692 million on the table? Or he would still receive 4/10ths of the deferred cash? The deferred money is guaranteed once it has been earned. The funds are verified 4x a year before being dispersed. To add, his 2024 earnings is 2M in 2024 and 68M in 2034. So if he were to opt out after 2024 he would be leaving 630M on the table rather than 698M, but would need to wait until 2034 to get the 68M. Same thing for 2025, 2M in 2025 and 68M in 2035, and so on.
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Post by foreverred9 on Dec 14, 2023 20:35:31 GMT -5
Its true that the entity that loses the most here might be California, the state misses out on hundreds of millions of dollars potentially. Although, it’s possible he just would have signed elsewhere if he couldn’t do this, and they’d be getting nothing at all. This way they still get cuts of his $2m and the endorsement money he makes there, plus a cut of additional profit the Dodgers make. The state income tax angle is interesting. First, doesn't the location of the games dictate where state income tax is paid? In other words, doesn't California normally get revenue on a little over half of Dodger's player salaries? Second, on the deferred compensation portion, do any states have procedures in place to capture that revenue? The amount of deferred compensation is unusual, but the concept isn't new. Yes, the taxable income in a given year gets allocated based on where the players play. But his taxable income would only include 2M of the 70M "earned" that year. There's a rule (might be state-by-state, and likely way more nuanced) that if you deferred the compensation by 10 years or more, you get taxed in the state in which you reside rather than the state in which you earned the income. turbotax.intuit.com/tax-tips/tax-payments/strategies-for-managing-your-tax-bill-on-deferred-compensation/L83l5ousH
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Post by philsbosoxfan on Dec 14, 2023 22:17:21 GMT -5
I moved from California to Nevada for a year prior to moving to the Philippines. No state income taxes in Nevada. California taxes Social Security.
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Post by asm19 on Dec 15, 2023 10:07:45 GMT -5
January 24, 2023: Arte Moreno decides not to sell the Angels. (Possible buyers had included Golden State Warriors owner Joe Lacob)
July-August 2023 - Moreno and the Angels decide not to trade Ohtani
Last weekend: "Arte Moreno and the Angels failed to match Shohei Ohtani’s $700 million contract offer with the Dodgers — even after Ohtani’s camp tried to continue negotiations late into his free agency."
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Post by ematz1423 on Dec 15, 2023 10:20:34 GMT -5
January 24, 2023: Arte Moreno decides not to sell the Angels. (Possible buyers had included Golden State Warriors owner Joe Lacob) July-August 2023 - Moreno and the Angels decide not to trade Ohtani Last weekend: "Arte Moreno and the Angels failed to match Shohei Ohtani’s $700 million contract offer with the Dodgers — even after Ohtani’s camp tried to continue negotiations late into his free agency." The Angels have to be in the running for the most poorly run franchise in the league. It's one thing to not trade him if you have every intention to re-sign him, there's nothing wrong with that thought in my eyes. However clearly he didn't have every intention of doing so unless they're just so out of it that they didn't calculate what his AAV was going to be in the end. Ohtani could have sparked their rebuild pretty good since he'd have brought back a solid haul at the deadline even for just the half a year but now all they get is a draft pick and a crummy team and farm system.
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Post by julyanmorley on Dec 15, 2023 12:28:51 GMT -5
Offering the same deal to the Angels makes it seem like it’s about California taxes
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Post by incandenza on Dec 16, 2023 10:55:01 GMT -5
There's a little bit of ambiguity here, but this makes it sound like the Dodgers actually did offer a straight 10/700 and Ohtani voluntarily took a huge pay cut in the form of deferrals: This is apparently coming from the agent, though, and it still doesn't make sense unless Ohtani's motivation were a) a tax dodge, and/or b) bragging rights for getting the biggest contract in history. Because otherwise he could've just said to teams: give me $460 million and I'll sign with whichever team I like best.
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Post by asm19 on Dec 18, 2023 10:59:27 GMT -5
There is non-zero chance that Ohtani stayed in Southern California so that he wouldn’t have to find a new pet-sitter, dog daycare, or veterinarian for Decoy. 🥰
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Post by Guidas on Dec 22, 2023 19:42:08 GMT -5
There's a little bit of ambiguity here, but this makes it sound like the Dodgers actually did offer a straight 10/700 and Ohtani voluntarily took a huge pay cut in the form of deferrals: This is apparently coming from the agent, though, and it still doesn't make sense unless Ohtani's motivation were a) a tax dodge, and/or b) bragging rights for getting the biggest contract in history. Because otherwise he could've just said to teams: give me $460 million and I'll sign with whichever team I like best.
Uhm, about that. Seems as though Ohtani found away to make up for his . Money quote (literally): When Ohtani receives the bulk of the money, he’ll no longer be under contract with the Dodgers; experts say that the structure of the contract appears likely to save Ohtani between $90 and $100 million in state taxes, so long as he lives outside of California when the deferred money is paid out.
The rich aren't smarter than us. But their accountants may be.
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Post by incandenza on Dec 22, 2023 20:29:58 GMT -5
There's a little bit of ambiguity here, but this makes it sound like the Dodgers actually did offer a straight 10/700 and Ohtani voluntarily took a huge pay cut in the form of deferrals: This is apparently coming from the agent, though, and it still doesn't make sense unless Ohtani's motivation were a) a tax dodge, and/or b) bragging rights for getting the biggest contract in history. Because otherwise he could've just said to teams: give me $460 million and I'll sign with whichever team I like best.
Uhm, about that. Seems as though Ohtani found away to make up for his . Money quote (literally): When Ohtani receives the bulk of the money, he’ll no longer be under contract with the Dodgers; experts say that the structure of the contract appears likely to save Ohtani between $90 and $100 million in state taxes, so long as he lives outside of California when the deferred money is paid out.
The rich aren't smarter than us. But their accountants may be. You say "smarter," I say "more lacking in integrity." Po-tay-to, po-tah-to.
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Post by Guidas on Dec 23, 2023 9:52:34 GMT -5
Uhm, about that. Seems as though Ohtani found away to make up for his . Money quote (literally): When Ohtani receives the bulk of the money, he’ll no longer be under contract with the Dodgers; experts say that the structure of the contract appears likely to save Ohtani between $90 and $100 million in state taxes, so long as he lives outside of California when the deferred money is paid out.
The rich aren't smarter than us. But their accountants may be. You say "smarter," I say "more lacking in integrity." Po-tay-to, po-tah-to. "I didn't pass the laws, your honor. I'm just abiding by them."
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Post by pappyman99 on Dec 23, 2023 9:56:12 GMT -5
You say "smarter," I say "more lacking in integrity." Po-tay-to, po-tah-to. "I didn't pass the laws, your honor. I'm just abiding by them." Not to get into it but no way does state tax law or federal tax law not change after this No way the Gov accepts even a foreign friendly national government collecting a large sum of taxes on an American contract Honestly I bet CA is already looking at this and yeah his contract can’t change but that tax law can change really quick and he could find himself paying the full tax there on everything
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Post by incandenza on Dec 23, 2023 10:56:44 GMT -5
You say "smarter," I say "more lacking in integrity." Po-tay-to, po-tah-to. "I didn't pass the laws, your honor. I'm just abiding by them." Yeah, I get it to a point. But no one made Ohtani present his tax dodge and ego-boosting claim to have signed the biggest sports contract ever as a selfless act to help his team win. I really like him a bit less after all this.
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Post by Guidas on Dec 23, 2023 11:52:42 GMT -5
"I didn't pass the laws, your honor. I'm just abiding by them." Yeah, I get it to a point. But no one made Ohtani present his tax dodge and ego-boosting claim to have signed the biggest sports contract ever as a selfless act to help his team win. I really like him a bit less after all this. To the contrary - I think this makes him as American now as all the mega millionaires and billionaires who built up Silicon Valley multi-national corporation, yet conveniently claim one of their several other homes outside of California as their permanent residence. These laws were created specifically for the super-rich to do exactly this.
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Post by scottysmalls on Dec 23, 2023 12:24:33 GMT -5
"I didn't pass the laws, your honor. I'm just abiding by them." Not to get into it but no way does state tax law or federal tax law not change after this No way the Gov accepts even a foreign friendly national government collecting a large sum of taxes on an American contract Honestly I bet CA is already looking at this and yeah his contract can’t change but that tax law can change really quick and he could find himself paying the full tax there on everything California brings in over $600b dollars a year. I highly doubt they are going to go to great lengths to change laws over a missing $100m. Especially given the public nature of Ohtani and the value of having guys like that want to be in your state. As Guidas pointed out it’s no different than the SV billionaires.
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Post by philsbosoxfan on Dec 23, 2023 12:57:50 GMT -5
Not to get into it but no way does state tax law or federal tax law not change after this No way the Gov accepts even a foreign friendly national government collecting a large sum of taxes on an American contract Honestly I bet CA is already looking at this and yeah his contract can’t change but that tax law can change really quick and he could find himself paying the full tax there on everything California brings in over $600b dollars a year. I highly doubt they are going to go to great lengths to change laws over a missing $100m. Especially given the public nature of Ohtani and the value of having guys like that want to be in your state. As Guidas pointed out it’s no different than the SV billionaires. I'm expecting a wave of public California contracts structured similarly. This isn't going to go unnoticed. At some point they can just do what I did, move to Nevada.
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Post by julyanmorley on Jan 10, 2024 11:17:34 GMT -5
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Post by ematz1423 on Jan 10, 2024 11:23:56 GMT -5
Good ole state of Cali trying to make sure they get their mitts on all the money they can. I wonder what effect that would have on the Dodgers/Ohtani in particular though? The contract is signed and agreed on so if they changed the code to cap deferred payments would that potentially nullify the deal? Would the Dodgers just get boned and have Ohtani at 50-60 AAV instead of the 40ish he's at now? Something to keep an eye on there.
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Post by 0ap0 on Jan 10, 2024 12:32:24 GMT -5
Would the Dodgers just get boned and have Ohtani at 50-60 AAV instead of the 40ish he's at now? Something to keep an eye on there. I don't know anything about retro-activity, but at most it'd be that someone, either the Dodgers or Ohtani, would have to pony up a regular amount of income tax. It shouldn't matter at all for AAV calculations -- deferred money still earns interest and is cheaper than present-day money.
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