Andrew Dana was quoted in Forbes and featured on a Tax Notes Talk podcast about the key tax considerations for NCAA athletes now that they can make money off their name, image, and likeness, commonly called NIL.
“I think you're going to see a lot of uses by athletes of their name, image, and likeness, both for profit but also for some social initiative or charitable use,” Andrew said. “It's going to be fun to see how they deploy their new ability to really leverage something that is, at the end of the day, their property.”
"They're now running a small business," he said. "Some of these deals are incredibly lucrative. As a result, the question is, 'Well, how do I, as a college athlete, structure my business affairs and deal with the tax consequences of those?'"
"They need a quick education on do I set up [a limited liability company] under state law?" he continued. "If so, do I tax it as a partnership? Do I file an S election? Do I understand how passthrough taxation works? If, for instance, my plan is to take my revenue and reinvest it in my brand and my marketing, maybe I'd be interested in structuring a C corporation, which has the lowest initial tax but double taxation."
"You're going to have a different strategy," he continued, "potentially for those athletes that say, 'Hey, I want to take all of the money that I'm collecting and immediately put it in my pocket,' versus those that say, 'Hey, maybe I want to reinvest.'"
You can find the Forbes article here, which is an edited transcript of the Tax Notes Talk podcast: Taxing College Athletes After NCAA v. Alston.
You can listen to the full Tax Notes Talk podcast here: Taxing College Athletes After NCAA v. Alston.
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