Author Topic: Kawahi Leonard offered a free multi-million dollar penthouse if he stays  (Read 4585 times)

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Online celticinorlando

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But you have to live in Toronto....

Offline jambr380

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If this could end up being a problem down the road, why wouldn't Kyrie just sign an endorsement deal with the real estate company and then have an agreement to purchase one of the condos from that company? It's not like it's illegal to sign endorsement deals for millions of dollars.

Offline RLewis35

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Read this on Complex.

"The Raptors Republic has not been shy when it comes to enticing him before he becomes a free agent on July 1. Simon Mass, the CEO of Condo Store Realty Inc., is also trying to sweeten the deal for Leonard.

Narcity reports that Mass is ready to gift Leonard a multi-million-dollar penthouse in Toronto if he re-signs with the Raptors. A representative confirmed as such, adding that he'll be able to choose between a number of different penthouse condos in the city. Needless to say, the places on offer look very extravagant."


Uh... How do you stop this level of tampering?

Is it really tampering though? Superfans have no affiliation with the team. The Raptors don't have a hand in any of this from what I have read. Anyone can gift anybody anything as long as the appropriate tax guidelines are followed.
NBA teams AND players are obligated to follow the CBA/Salary Cap rules against circumvention. Millions of dollars in free gifts would be ruled circumvention and be punished/disallowed.

Well... On a federal level, you're allowed a lifetime exception of $11.4 million in gift tax.

I don't know exactly how circumvention in NBA works, I might admit that I'm not familiar with it. But if the penthouse is multi million, Kawhi could technically pay a certain amount as a down payment, and then receive the other half of the estimated amount via the gift tax rule.

I'd assume this is what you're talking about Fafnir?

Quote
It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to enter into an agreement or understanding with any sponsor or business partner or third-party under which such sponsor, business partner or third-party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under Contract to the Team. Such an agreement with a sponsor or business partner or third-party may be inferred where: (i) such compensation from the sponsor or business partner or third-party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third-party; and (ii) the Compensation in the Player Contract between the player and the Team is substantially below the fair market value of such Contract.

At no time shall there be any agreements or transactions of any kind (whether disclosed or undisclosed to the NBA), express or implied,oral or written, or promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind (whether disclosed or undisclosed to the NBA), between a player (or any person or entity controlled by, related to, or acting with authority on behalf of, such player) and any Team (or Team Affiliate):
concerning any future Renegotiation, Extension, or other amendment of an existing Player Contract, or entry into a new Player Contract; or
except as permitted by this Agreement or as set forth in a Uniform Player Contract (provided that the Team has not intentionally delayed submitting such Uniform Player Contract for approval by the NBA), involving compensation or consideration of any kind or anything else of value, to be paid, furnished or made available by, to, or for the benefit of the player, or any person or entity controlled by, related to, or acting with authority on behalf of the player; or
except as permitted by this Agreement, involving an investment or business opportunity to be furnished or made available by, to, or for the benefit of the player, or any person or entity controlled by, related to, or acting with authority on behalf of the player).

FWIW the federal gift tax exemption of 11.4M is the amount each person may give away during life or at death (not counting any gifts subject to the marital deduction, charitable deduction or annual gift tax exclusion) before such individual will have to pay a 40 pct gift tax on any future gifts. 

There is no limit on how much anyone can receive in gifts - so kawhi could be given a 100M mansion if someone wants to give it to him - it would be a tax issue of the donor not the recipient, and if the donor is a Canadian citizen giving Canadian property, the US tax laws wouldn’t apply.

Offline Ogaju

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Read this on Complex.

"The Raptors Republic has not been shy when it comes to enticing him before he becomes a free agent on July 1. Simon Mass, the CEO of Condo Store Realty Inc., is also trying to sweeten the deal for Leonard.

Narcity reports that Mass is ready to gift Leonard a multi-million-dollar penthouse in Toronto if he re-signs with the Raptors. A representative confirmed as such, adding that he'll be able to choose between a number of different penthouse condos in the city. Needless to say, the places on offer look very extravagant."


Uh... How do you stop this level of tampering?

Is it really tampering though? Superfans have no affiliation with the team. The Raptors don't have a hand in any of this from what I have read. Anyone can gift anybody anything as long as the appropriate tax guidelines are followed.
NBA teams AND players are obligated to follow the CBA/Salary Cap rules against circumvention. Millions of dollars in free gifts would be ruled circumvention and be punished/disallowed.

Well... On a federal level, you're allowed a lifetime exception of $11.4 million in gift tax.

I don't know exactly how circumvention in NBA works, I might admit that I'm not familiar with it. But if the penthouse is multi million, Kawhi could technically pay a certain amount as a down payment, and then receive the other half of the estimated amount via the gift tax rule.

I'd assume this is what you're talking about Fafnir?

Quote
It shall constitute a violation of Section 1(a) above for a Team (or Team Affiliate) to enter into an agreement or understanding with any sponsor or business partner or third-party under which such sponsor, business partner or third-party pays or agrees to pay compensation for basketball services (even if such compensation is ostensibly designated as being for non-basketball services) to a player under Contract to the Team. Such an agreement with a sponsor or business partner or third-party may be inferred where: (i) such compensation from the sponsor or business partner or third-party is substantially in excess of the fair market value of any services to be rendered by the player for such sponsor or business partner or third-party; and (ii) the Compensation in the Player Contract between the player and the Team is substantially below the fair market value of such Contract.

At no time shall there be any agreements or transactions of any kind (whether disclosed or undisclosed to the NBA), express or implied,oral or written, or promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind (whether disclosed or undisclosed to the NBA), between a player (or any person or entity controlled by, related to, or acting with authority on behalf of, such player) and any Team (or Team Affiliate):
concerning any future Renegotiation, Extension, or other amendment of an existing Player Contract, or entry into a new Player Contract; or
except as permitted by this Agreement or as set forth in a Uniform Player Contract (provided that the Team has not intentionally delayed submitting such Uniform Player Contract for approval by the NBA), involving compensation or consideration of any kind or anything else of value, to be paid, furnished or made available by, to, or for the benefit of the player, or any person or entity controlled by, related to, or acting with authority on behalf of the player; or
except as permitted by this Agreement, involving an investment or business opportunity to be furnished or made available by, to, or for the benefit of the player, or any person or entity controlled by, related to, or acting with authority on behalf of the player).

FWIW the federal gift tax exemption of 11.4M is the amount each person may give away during life or at death (not counting any gifts subject to the marital deduction, charitable deduction or annual gift tax exclusion) before such individual will have to pay a 40 pct gift tax on any future gifts. 

There is no limit on how much anyone can receive in gifts - so kawhi could be given a 100M mansion if someone wants to give it to him - it would be a tax issue of the donor not the recipient, and if the donor is a Canadian citizen giving Canadian property, the US tax laws wouldn’t apply.

US tax laws will not apply as long as it it a gift. The IRS will move to make it income subject to income tax. Besides none of the tax implication affect the obvious salary cap implications. You cannot increase a players income from playing basketball by calling it a gift. The moment the donor makes the 'gift' conditional on Kawhi playing for Toronto it  becomes an exchange and it will be ruled to be income. The condideration for the house is Kawhi playing for the Raptors.

Offline RLewis35

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He’s not affiliated with the raptors.  Hard to argue it’s compensation.  I agree the IRS would move to treat it as compensation but not sure the level of success they would have.  The facts would be important of course.

Whether the nba considers it a violation is a whole different story.

Offline MaxAMillion

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I think he wanted to be a Spur for life but his team threw him under the bus and disrespected him in front of the media

really good chance he stays in Toronto or goes to LA I don't see any other option.
Refusing to play for an entire year is a weird way to indicate you want to be a Spur for life.
Questioning your best player's health is a weird way to show you appreciate his efforts and trust him going forward. I would have wanted to leave the second I was questioned about being injured.