Broker Check

Sports and Taxes...

September 05, 2023

Hi All,

I hope this email finds you well. I recently stumbled upon an intriguing tax breakdown involving Anthony Davis of the LA Lakers, who just signed the NBA’s richest annual extension for 3 years at $186 million.
Davis’s story is remarkable. Born in Chicago, he attended a Charter school known for its strong academic reputation but minimal athletic success. The school had no gymnasium, and Davis’s basketball practice took place at a nearby church. His growth both in height (from 6’ as a freshman to 6’10” today) and skill has led him to become one of the most talented NBA players.
Now, let’s delve into the annual financial breakdown of Davis’s contract:
Salary: $62 M
Federal Tax: $22.9 M
NBA Escrow: $6 M
California Taxes: $4.1 M
Agent Fee: $1.8 M
Jock Tax: $1.8 M
FICA/Medicare: $1.4 M
Net Income: $24 M
This fascinating example highlights the complexity of taxation in various professional fields and underscores the importance of astute financial planning.
As always, thank you for entrusting me with your financial needs. Should you have any questions or wish to explore how these tax principles may apply to your personal situation, please don’t hesitate to reach out. I appreciate you.
Best regards,