More on Estate Planning and the Pittsburgh Steelers

Earlier on this blog, I discussed some possible estate planning aspects of a possible sale of the Pittsburgh Steelers professional football team.

The following discussion of the income and estate aspects of such a sale combined with the possible changes to the law depending on the victor of the Presidential election is from Darren Rovell, Pittsburgh Steelers, Taxes (Obama) And Selling Sports Teams, Sports Biz, July 8, 2008:

A capital gains tax is a tax on the profit from a sale of something. Currently, if an owner sells a team, he’ll have to give 15 percent of the profit back to the government in capital gains. But under Obama’s current plans, that number could rise to as much as 28 percent, meaning that the money paid to the government after the sale of the team might double by next year.

Let’s say the Rooneys could get $1.3 billion for the Steelers. Factoring in everything they pumped into the team, let’s say their profit is $600 million. Selling it now vs. if Obama is in office could mean the difference of nearly $80 million.

The second tax aspect that affects sales is the estate tax, which is the government’s charge for passing down businesses to family members. In 2010, for just that year, the estate tax is repealed, so many of the wealthy–including sports team owners–are hoping to make it to Jan. 1, 2010 and die before Jan. 1, 2011, so that their team can be passed down through the family without a charge.

Special thanks to David S. Luber (Attorney at law, Florida Probate Attorney Wills and Estates Law Firm) for bringing this article to my attention.