I didn't think that through all the way. You are right and that will make all the difference.

Tango.Mike said:

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VitruvianAg said:

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BMX Bandit said:

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Quote:

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Hmmm, is this GIFT money?

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no.

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Why not? Just curious.

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If it's gift money it is not compensation for using the player's NIL. NIL is a contractual agreement, like any other endorsement. The athlete can still get monetary gifts, but those are still under the table payments not related to NIL. And whether the gifted paid income taxes isn't relevant. If I gift you $11k (you're correct about the $10k), you'll pay taxes on it regardless of the fact that I've also paid taxes on it somewhere previously

For things like jersey sales, the athlete would get whatever royalty percentage the vendor pays. Back when you could only buy generic #12 jerseys, the school got 100% of whatever royalties. Now the school (12th man foundation, athletic dept, and university licensing all will get a cut) has to share some tiny slice with the kid whose name is on the shirt. It will be like every other royalty item - cost of shirt minus cost of inputs minus royalties = store profit

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You are correct that if there is consideration (a service, a license, etc.) then it cannot be considered a gift.

But your example isn't correct; you can gift to any individual up to the annual exclusion without tax consequences for the donor or donee. $11,000 is well below that limit.

SW AG80 said:

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I agree they will be contract employees. That raises a question in my mind. Since they are now contract employees, could that make their free housing and food a taxable event?

If so, then there will be all sorts of problems.

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The NIL contract is not with the university. The university provides the food and housing. The external company who contracts to use the athlete's NIL provides the 1099 for contract employment

There are already incredibly complicated tax laws for scholarships, room and board, stipends, etc. But NIL is not related to any of that. Even royalties from Jersey sales would come from the company selling the shirt not from the university

one safe place said:

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"Unlike many states, Texas's NIL bill requires "a student athlete participating in an intercollegiate athletic program at the institution to attend a financial literacy and life skills course during the student's first academic year at the institution. The course must be at least five hours in duration and include information on financial aid, debt management, time management, budgeting, and academic resources available to the student athlete."

So there are many states that don't require anything. Though better than nothing, not sure how much impact "at least five hours" is going to provide, especially for an 18 or 19 year old. Around March and April there are going to be some long faces, "students" and parents alike.

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Yes, NIL income probably eliminates the student, from "dependent" status, off the parents' return.

fc2112 said:

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they are not contract employees of the school. they're contract employees of whoever pays their NIL money.

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Should the team be charged rent on the stadium?

goatchze said:

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Tango.Mike said:

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VitruvianAg said:

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BMX Bandit said:

---

Quote:

---

Hmmm, is this GIFT money?

---

no.

---

Why not? Just curious.

---

If it's gift money it is not compensation for using the player's NIL. NIL is a contractual agreement, like any other endorsement. The athlete can still get monetary gifts, but those are still under the table payments not related to NIL. And whether the gifted paid income taxes isn't relevant. If I gift you $11k (you're correct about the $10k), you'll pay taxes on it regardless of the fact that I've also paid taxes on it somewhere previously

For things like jersey sales, the athlete would get whatever royalty percentage the vendor pays. Back when you could only buy generic #12 jerseys, the school got 100% of whatever royalties. Now the school (12th man foundation, athletic dept, and university licensing all will get a cut) has to share some tiny slice with the kid whose name is on the shirt. It will be like every other royalty item - cost of shirt minus cost of inputs minus royalties = store profit

---

You are correct that if there is consideration (a service, a license, etc.) then it cannot be considered a gift.

But your example isn't correct; you can gift to any individual up to the annual exclusion without tax consequences for the donor or donee. $11,000 is well below that limit.

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Good call. The 2024 exclusion value is $18k or so. I haven't done personal accounting in a long time and didn't look up the current values

BMX Bandit said:

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state law in Texas and most states with NIL laws require courses on financial planning/literacy be taught


https://www.si.com/fannation/name-image-likeness/news/texas-am-hosts-education-financial-literacy-conference-collaboration-advance-nick9

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But can their Tutors take those classes online for them also?

BQ_90 said:

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Owlagdad said:

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18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

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go play DII or DIII ball then

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Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

Squadron7 said:

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BQ_90 said:

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Owlagdad said:

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18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

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go play DII or DIII ball then

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Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

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Lol. Is there any checking of transcripts anymore? Since they identify these guys as sophomores in high school, will they eventually start paying them then? Will kids shut it down academically in HS?
What's the need to write a paper or learn any math when you can make millions at 18? Notice momma ain't a factor anymore listening to coach telling her that her son will get a degree. She gonna get rich right away!!

Squadron7 said:

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BQ_90 said:

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Owlagdad said:

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18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

---

go play DII or DIII ball then

---

Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

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the students are benefiting, esp MBB and football You know the sports that bring in the money. If you don't like it, go support a DII or DIII school then. All this hang wringing on NIL is pretty funny to me.

Owlagdad said:

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Squadron7 said:

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BQ_90 said:

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Owlagdad said:

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18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

---

go play DII or DIII ball then

---

Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

---

Lol. Is there any checking of transcripts anymore? Since they identify these guys as sophomores in high school, will they eventually start paying them then? Will kids shut it down academically in HS?
What's the need to write a paper or learn any math when you can make millions at 18? Notice momma ain't a factor anymore listening to coach telling her that her son will get a degree. She gonna get rich right away!!

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Yes we should go back to the good old days where players got paid under the table, boosters paid for somebody to take SATs for a recruit, and players got free As in school in fake majors. Back when things where pure and clean

4 said:

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End the IRS

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RIP, HC

BQ_90 said:

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Owlagdad said:

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Squadron7 said:

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BQ_90 said:

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Owlagdad said:

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18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

---

go play DII or DIII ball then

---

Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

---

Lol. Is there any checking of transcripts anymore? Since they identify these guys as sophomores in high school, will they eventually start paying them then? Will kids shut it down academically in HS?
What's the need to write a paper or learn any math when you can make millions at 18? Notice momma ain't a factor anymore listening to coach telling her that her son will get a degree. She gonna get rich right away!!

---

Yes we should go back to the go old days where players got paid under the table, boosters paid for somebody to take SATs for a recruit, and players got free As in school in fake majors. Back when things where pure and clean

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If those illegal payments were farce, so is the thought the new players who may stay a year or not, are student athletes and actually appreciate the 12th man- or is it time to change all that like many on the zoo want?

Owlagdad said:

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BQ_90 said:

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Owlagdad said:

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Squadron7 said:

---

BQ_90 said:

---

Owlagdad said:

---

18 year olds with an accountant.
I just wanted to play SWC football , chase women , drink beer and get a degree.
Will say if you bring in guys who can't do an IRS short form ( what business expense would they have?) will they remember the playbook?

---

go play DII or DIII ball then

---

Absolutely! Don't you know that D1 is to serve the entertainment desires of alumni? Not do anything crazy like benefit the student.

---

Lol. Is there any checking of transcripts anymore? Since they identify these guys as sophomores in high school, will they eventually start paying them then? Will kids shut it down academically in HS?
What's the need to write a paper or learn any math when you can make millions at 18? Notice momma ain't a factor anymore listening to coach telling her that her son will get a degree. She gonna get rich right away!!

---

Yes we should go back to the go old days where players got paid under the table, boosters paid for somebody to take SATs for a recruit, and players got free As in school in fake majors. Back when things where pure and clean

---

If those illegal payments were farce, so is the thought the new players who may stay a year or not, are student athletes and actually appreciate the 12th man- or is it time to change all that like many on the zoo want?

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for the most part players have always been hired guns. Now they are just more mobile.

Again what got SMU the death penalty now got them into the college football playoff

In the end the players loyalty are to themselves, which wasn't much different in the past, they just had to sit out a year before they could play somewhere else. The NCAA and the schools ****ed around and didn't fix the issues so the courts decided for them and we have what we have.

Now we either accept it, stop paying attention, or the worst option, let congress get involved

Agree. And since they have no allegiance to school, and I pay for a ticket and expect full effort, and the right to leave and boo if I don't get value for my Buck!

Ellis Wyatt said:

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I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

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1099-NEC. For non-employment compensation which after 2020 is what independent contractors receive instead of 1099-MISC.

Burdizzo said:

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Kenneth_2003 said:

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ABATTBQ11 said:

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CanyonAg77 said:

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Quote:

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It's very important for student-athletes to track their NIL earnings and make periodic estimated tax payments throughout the year.

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How many do you think are doing that? 50% 10% ????????

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All of them. I would bet the ADs probably have someone taking care of teaching athletes what they need to take care of and how NIL works, just like any other resource.

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Pretty sure they have agents now

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I believe that is correct, and any agent worth their Jerry McGuire VCR tape is going to include tax advisor services.

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Even those who don't have agents, the NIL collectives make sure taxes are paid. It would be counterproductive not to.

Definitely not a gift. BTW the 2024 gift exclusion is $18,000 for individuals and $36,000 for couples. Give more and you are to submit Form 709. one of the worst form ever created.

Ellis Wyatt said:

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I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

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this

BMX Bandit said:

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Ellis Wyatt said:

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I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

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you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

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the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

CanyonAg77 said:

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Quote:

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It's very important for student-athletes to track their NIL earnings and make periodic estimated tax payments throughout the year.

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How many do you think are doing that? 50% 10% ????????

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They have agents to do that for them.

zephyr88 said:

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BMX Bandit said:

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Ellis Wyatt said:

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I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

---

you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

---

the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

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I also expect there to be some sort of audit related to whether or not there were truly some values associated with NIL or people are just getting paid because their names are on a roster.

Quote:

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the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

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There is a less than zero chance the NCAA ever says someone is ineligible because they didn't pay taxes on NIL deal.

Burdizzo said:

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zephyr88 said:

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BMX Bandit said:

---

Ellis Wyatt said:

---

I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

---

you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

---

the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

---

I also expect there to be some sort of audit related to whether or not there were truly some values associated with NIL or people are just getting paid because their names are on a roster.

---

What would that audit be to determine? They got money. It was income. The IRS doesn't give a **** after that.

Tango.Mike said:

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goatchze said:

---

Tango.Mike said:

---

VitruvianAg said:

---

BMX Bandit said:

---

Quote:

---

Hmmm, is this GIFT money?

---

no.

---

Why not? Just curious.

---

If it's gift money it is not compensation for using the player's NIL. NIL is a contractual agreement, like any other endorsement. The athlete can still get monetary gifts, but those are still under the table payments not related to NIL. And whether the gifted paid income taxes isn't relevant. If I gift you $11k (you're correct about the $10k), you'll pay taxes on it regardless of the fact that I've also paid taxes on it somewhere previously

For things like jersey sales, the athlete would get whatever royalty percentage the vendor pays. Back when you could only buy generic #12 jerseys, the school got 100% of whatever royalties. Now the school (12th man foundation, athletic dept, and university licensing all will get a cut) has to share some tiny slice with the kid whose name is on the shirt. It will be like every other royalty item - cost of shirt minus cost of inputs minus royalties = store profit

---

You are correct that if there is consideration (a service, a license, etc.) then it cannot be considered a gift.

But your example isn't correct; you can gift to any individual up to the annual exclusion without tax consequences for the donor or donee. $11,000 is well below that limit.

---

Good call. The 2024 exclusion value is $18k or so. I haven't done personal accounting in a long time and didn't look up the current values

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2024 is $18K, 2025 goes up to 19K

Pinochet said:

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Burdizzo said:

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zephyr88 said:

---

BMX Bandit said:

---

Ellis Wyatt said:

---

I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

---

you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

---

the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

---

I also expect there to be some sort of audit related to whether or not there were truly some values associated with NIL or people are just getting paid because their names are on a roster.

---

What would that audit be to determine? They got money. It was income. The IRS doesn't give a **** after that.

---

He's probably talking about NCAA compliance, not the IRS.

It's in the name - NAME image likeness. They are being paid because their name is on a roster. It's literally what the whole thing is for.

I have not disagreed with you bud!

Burdizzo said:

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zephyr88 said:

---

BMX Bandit said:

---

Ellis Wyatt said:

---

I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

---

you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

---

the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

---

I also expect there to be some sort of audit related to whether or not there were truly some values associated with NIL or people are just getting paid because their names are on a roster.

---

I would expect any audit to focus on any claimed expenses, and possibly unclaimed income in the form of non-cash payments.

gigemhilo said:

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Pinochet said:

---

Burdizzo said:

---

zephyr88 said:

---

BMX Bandit said:

---

Ellis Wyatt said:

---

I am going to assume that recipients of NIL are treated as contract employees, therefore whatever taxes are due are the recipient's sole responsibility.

---

you are correct

don't know why an IRS "ruling" would be needed as it's not really disputed, or if anyone has even asked.

---

the next wave of ineligibility will be levied against players who don't file/pay taxes on their "earnings"

---

I also expect there to be some sort of audit related to whether or not there were truly some values associated with NIL or people are just getting paid because their names are on a roster.

---

What would that audit be to determine? They got money. It was income. The IRS doesn't give a **** after that.

---

He's probably talking about NCAA compliance, not the IRS.

---

No, I am talking about the IRS. There was a suit a few years ago where the chairman of the NYSE was taken to court by the feds because the NYSE at the time claimed non-profit status and the chairman's compensation was about $140MM. The suit was eventually dropped because NYSE changed their status to for-profit, but the "excessive" part stuck out in my memory. The prosecutor was Spritzer, so that should tell you a lot about the case.

In the case of NIL, I could still see there being a case that the compensation for NIL is fair and reasonable and not just a gift. There has to be an arguable market value for the NIL because of compensation for services and gifts get taxed at different rates. If some benchwarmer gets highly compensated for essentially nothing then I could envision the IRS asking for backup to justify the compensation.

IANAL or tax expert, but I have seen a lot of overreach by IRS over the years. I would not be shocked to see it happen is all I am saying. That is the way those a-holes work.

Tango.Mike said:

---

VitruvianAg said:

---

BMX Bandit said:

---

Quote:

---

Hmmm, is this GIFT money?

---

no.

---

Why not? Just curious.

---

If it's gift money it is not compensation for using the player's NIL. NIL is a contractual agreement, like any other endorsement. The athlete can still get monetary gifts, but those are still under the table payments not related to NIL. And whether the gifted paid income taxes isn't relevant. If I gift you $11k (you're correct about the $10k), you'll pay taxes on it regardless of the fact that I've also paid taxes on it somewhere previously

For things like jersey sales, the athlete would get whatever royalty percentage the vendor pays. Back when you could only buy generic #12 jerseys, the school got 100% of whatever royalties. Now the school (12th man foundation, athletic dept, and university licensing all will get a cut) has to share some tiny slice with the kid whose name is on the shirt. It will be like every other royalty item - cost of shirt minus cost of inputs minus royalties = store profit

---

Someone else may have pointed this out about the bolded part, but a gift is not income to the recipient.

Bit of a moot point though, because NIL is obviously not a gift. Though not the only reason, one reason is that gifts, and the related gift tax consequences, are made by individuals. NIL collectives, which are making the NIL payments to the "student" athletes, are not individuals.

TexasAggie_97 said:

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4 said:

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End the IRS

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Dude, how do you expect Liberals to buy votes by keeping people hooked on government cheese?

---

How do you expect to maintain a large military without the IRS catching tax cheats?

The fair market value of free vehicles as part of NIL is also taxable.

…..20 year old jocks with pockets full money on a college campus where they are worshipped as kings.

Federal and state taxes will only be a part of the problem.

End of college sports

Quote:

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No, I am talking about the IRS. There was a suit a few years ago where the chairman of the NYSE was taken to court by the feds because the NYSE at the time claimed non-profit status and the chairman's compensation was about $140MM. The suit was eventually dropped because NYSE changed their status to for-profit, but the "excessive" part stuck out in my memory. The prosecutor was Spritzer, so that should tell you a lot about the case.

---

It was the state of New York that found the suit, not the federal government. State governments have a role in probably every state watching over non-profits.

The IRS is not going to try to claim that NIL money is a gift. They go the opposite way, claim that gifts are actually income.


What the IRS has done regarding NIL is to say that all these collectives that popped up are not tax exempt nonprofits.