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When will the IRS focus on NIL payments?

They call it NIL so that the ncaa doesn't have to treat the players like professional athletes I'd assume. Also because we like to pretend in amateurism for some reason.
 
HFCS said:
So you can just pay a player a million bucks and not pretend it's for NIL, there doesn't have to be endorsement involved?

Why do we still call it NIL?
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You can call it whatever you want. It doesn't change its legality.
 
Mr Janny said:
You can call it whatever you want. It doesn't change its legality.
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I think Clone52 explained core of what I was missing.

There's no actual law involved at all, it's just NCAA policy...but correct me if I'm wrong here...NCAA policy they changed because of mounting legit legal threats?

It's actually refreshing for me to think it's just an irrational silly NCAA rule or semantic labeling of payments because it fits their long history of absurd application of rules/discipline/punishment. So it's irrational to pretend it's "NIL" but it's just the NCAA playing this game and they've been doing irrational pretend on any number of things for quite a while.
 
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HFCS said:
So if I'm a wealthy booster I can just give a player a million dollars and not tie it to some NIL deal. Just publicly say I paid him to sign with ISU?

That's what i don't understand, why is there some need to call it NIL? The vast majority of it has nothing to do with NIL. Like I'm asking literally how did that happen and if it's so important we call it NIL how is there no legal risk that it's obviously not NIL.
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It's purely semantics. Yes, it's a loophole for paying players to attend a specific school. That's not illegal. The only reason they have to call it NIL is because NIL is allowed by the NCAA and pay for play isn't. Is it an end around NCAA rules? Sure. But there's not much they can do about it. There's no governing body that puts limits on what people can be compensated for their name image and likeness. It's the free market. Tyrese Hunter's deal with the Texas collective is every bit as legitimate as LeBron James deal with Sprite. It doesn't matter if the ROI is good, bad, or middling. You're worth what someone is willing to pay you. End of story.

I, personally, don't have a problem with college athletes getting paid to play at a specific school. I think that's the way it should be, and the way it has been, for quite a while, even if it's only been above the table in recent years.
To me, the previous amateur model, where athlete values are artificially suppressed, and true competition between schools is disallowed, is the aberration. I'm fine with the pendulum swinging the other direction for a change. And if some schools can't adapt to the new reality, well that's too bad. Plenty of businesses fail all of the time. It sucks, but it's the way the world works.
 
HFCS said:
I'm admittedly ignorant about the legalities and tax realities.

The court cases cleared them to be paid for NIL. These huge lump sump payments for hundreds of thousands are very obviously contracts to play rather than NIL deals and I think you could easily prove it by comparing their endorsement value once they get a separate pro contract to play the same sport. It wouldn't make sense to look at just one player, but if you looked at hundreds or thousands of players over many years you could get great data that shows what % of the NIL payment is actually NIL.

I'm sure they are getting taxed for the NIL deal. Again I'm not an accountant. Maybe an endorsement deal gets taxed exactly like a player's NBA salary does, maybe not. Just does not seem sustainable when the payment is not for what it says it is for.
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Honestly I wouldn't worry about the gift thing. It's irrelevant to the student athlete and really irrelevant in general.

Even though you are only allowed to "gift" $XX amount a a person per year there is a lifetime max that allows you to exceed the yearly amount and the gifter still doesn't have to pay taxes.

For example (real example from a gift tax return a did a couple years ago): Your parents gift you a $200,000 house. Essentially the gift value amount over the annual allowed amount just gets allocated to future years against your lifetime allowable gift amount and no taxes will be paid on the transfer of the house.
 
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isufbcurt said:
Honestly I wouldn't worry about the gift thing. It's irrelevant to the student athlete and really irrelevant in general.

Even though you are only allowed to "gift" $XX amount a a person per year there is a lifetime max that allows you to exceed the yearly amount and the gifter still doesn't have to pay taxes.

For example (real example from a gift tax return a did a couple years ago): Your parents gift you a $200,000 house. Essentially the gift value amount over the annual allowed amount just gets allocated to future years against your lifetime allowable gift amount and no taxes will be paid on the transfer of the house.
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Quick google search says lifetime allowable gift amount is $12M. Is that about correct?
 
HFCS said:
I think Clone52 explained core of what I was missing.

There's no actual law involved at all, it's just NCAA policy...but correct me if I'm wrong here...NCAA policy they changed because of mounting legit legal threats?

It's actually refreshing for me to think it's just an irrational silly NCAA rule or semantic labeling of payments because it fits their long history of absurd application of rules/discipline/punishment. So it's irrational to pretend it's "NIL" but it's just the NCAA playing this game and they've been doing irrational pretend on any number of things for quite a while.
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It was a Supreme Court case the NCAA lost. I believe the plaintiff was Ed O'Obannon and all ncaa athletes
 
legi said:
Quick google search says lifetime allowable gift amount is $12M. Is that about correct?
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The lifetime gift limit is tied with the inheritance limit. If you give away a million dollar gift, it reduces the amount of your non taxable estate. Was thinking the current limit was enacted under Trump and has a sunset provision that would drop it down to around 3.5MM when it expires.

I could be mistaken, I stopped paying attention once my mom passed, but I should start paying attention since I’m getting older.
 
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BCClone said:
The lifetime gift limit is tied with the inheritance limit. If you give away a million dollar gift, it reduces the amount of your non taxable estate. Was thinking the current limit was enacted under Trump and has a sunset provision that would drop it down to around 3.5MM when it expires.

I could be mistaken, I stopped paying attention once my mom passed, but I should start paying attention since I’m getting older.
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Yes, it is. It is set to sunset in '26. I think it is currently $11.75 million per spouse. Set to go to $3 million (??) in '26 without further action from Congress.
 
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