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AztecSU

Fair or Not?

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I help run businesses and only have a passing grasp of the tax code. Can a CPA or Tax attorney help me understand the logic of $3B of a $3.8B purchase being a write off? I get that intangible assets can be amortized over 15 years, but why exactly?

 

 

 

 

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https://www.bloomberg.com/news/articles/2022-01-26/buyer-of-nfl-s-broncos-could-write-off-3-billion-sportico-says#:~:text=Whoever buys the NFL's Denver,%243 billion%2C according to Sportico.

 

Under Internal Revenue Service rules, the new owner will be allowed to deduct intangible assets, which can amount to more than 90% of a sports team’s value, the online news site said in a report Wednesday. Sportico valued the Broncos at $3.8 billion in September.

 

The write-off could reduce the team’s income tax burden by as much as $240 million annually for each of the next 15 years if the sales price were to reach $4 billion, Sportico reported. 

In the beginning the Universe was created.
This has made a lot of people very angry and been widely regarded as a bad move.

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13 minutes ago, RSF said:

https://www.bloomberg.com/news/articles/2022-01-26/buyer-of-nfl-s-broncos-could-write-off-3-billion-sportico-says#:~:text=Whoever buys the NFL's Denver,%243 billion%2C according to Sportico.

 

Under Internal Revenue Service rules, the new owner will be allowed to deduct intangible assets, which can amount to more than 90% of a sports team’s value, the online news site said in a report Wednesday. Sportico valued the Broncos at $3.8 billion in September.

 

The write-off could reduce the team’s income tax burden by as much as $240 million annually for each of the next 15 years if the sales price were to reach $4 billion, Sportico reported. 

I knew this, but I did just read through a description of the why behind amort'ing intangible assets. If I understand correctly the amortized portion of the sale represents cost over fair market value. 

 

 

 

 

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