Buying Buffalo Bills Would Save Donald Trump A Fortune In Taxes Donald Trump says he has been approached by a group of investors interested in buying the Buffalo Bills from the estate of Ralph Wilson, the NFL team’s Donald Trump says he has been approached by a group of investors interested in buying the Buffalo Bills from the estate of Ralph Wilson, the NFL team’s founder who passed away last week. His reply to the potential buyers: “I will take a look at it.” Of course he will. From a tax standpoint, being part of a group that bought the Bills would be a smart move. The Bills would go for around $900 million, and tax law established in 2004 allows the buyer to count the majority of the purchase price as an “intangible” asset that can be amortized–deducted from profits–over 15 years. Given their recently improved (from the standpoint of the Bills) stadium lease and the NFL’s collective bargaining agreement, even a small market team like Buffalo is likely to generate at least $200 million in pretax income over the next 15 years. Let’s assume that $800 million of the purchase price is amortized over 15 years. Such a large write-off would eliminate the team’s tax bill entirely. Moreover, the remainder ($600 million) of the write-off could be used to shield taxes from the other businesses owned by the team’s investors. Even if Trump were, say, just a 20% owner of the Bills, he would have perhaps $120 million of write-offs to deduct from his profitable businesses, like television and training programs. Besides, I would have to think that owning the Bills would be a lot more fun than running New York state.
Posted on: Thu, 03 Apr 2014 12:28:17 +0000
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