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KUUUCH
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Forum: Armchair-GMMar. 6, 2019 at 12:40 a.m.
<div class="quote"><div class="quote_t">Quoting: <b>drewjenks</b></div><div>Yeah I'm sure Matthews accountants are using Gavin's tax calculator to file his returns .....

<strong>He'res an "American" article from Forbes ... it clearly outlines how US born players or prior US residents (Tavares, Matthews, etc) can pay Florida tax rates. </strong>

<a href="https://www.forbes.com/sites/seanpackard/2018/07/06/john-tavares-could-save-nearly-12-million-in-taxes-on-his-new-contract/#6a0de42d1ab7" rel="nofollow noreferrer noopener" target="_blank">https://www.forbes.com/sites/seanpackard/2018/07/06/john-tavares-could-save-nearly-12-million-in-taxes-on-his-new-contract/#6a0de42d1ab7</a>

<strong>Excerpt from the article:
</strong>
"Most of the time, when a player is on a good NHL team (i.e., one that goes deep into the playoffs) he is forced to become a resident of his team's town/state/country due to his extended presence there. But because so many of Tavares’ road games will be in the US, Tavares can avoid Ontario’s combined federal/provincial 53.53% tax rate by remaining a US resident.

Article XVI of the US-Canada tax treaty states that signing bonuses paid to a resident of the US by a Canadian team are taxed at 15% in Canada, and vice versa for US teams paying bonuses to Canadian residents.

Having his signing bonus taxed at the low rate of 15% in Canada ensures that Tavares would receive a full foreign tax credit on his US return for all taxes paid in Canada on both is signing bonus and his salary each season. If he plans properly, he could save over $11.7 million over the life of his contract.

Tavares is almost certainly a US tax resident and likely has been since he came to New York in 2009. In order to enjoy the full $11.7 million in tax savings he would need to maintain his residency in the US but would need to move to a tax-free state, such as Florida. This means selling his New York home and buying one in Florida.

Buying a home in Florida is not enough to become a Florida resident, especially if he is on a seven-year contract in Canada. He would need most treaty tie-breakers for residency to go to the US/Florida. Thus, he would need to avoid having a permanent abode in Canada. Simply put, he should not own real estate nor get a twelve-month lease in Toronto. Go with a nine-month lease each season. This would ensure that he would pay the 37% US federal rate on his signing bonus instead of Ontario’s 53.53%."

<strong>This took 10 seconds to find ... you suck at research. </strong></div></div>

<div class="quote"><div class="quote_t">Quoting: <b>drewjenks</b></div><div>Your regular salary is taxed based on region.

Your signing bonus is not.

Matthews contract is roughly 95% signing bonus ... so this doesn't really apply to him.</div></div>

How nice of you to correct your author's spelling errors ;)
Fact check, your signing bonus IS taxed by region, whether it be 15%, 53%, 37%, etc.
Congrats, you found another article. Now find me another. There's nothing else. Here's 5 that disagree with you:

<a href="https://oilersnation.com/2018/07/10/comparing-nhl-player-contracts-based-on-city/" rel="nofollow noreferrer noopener" target="_blank">https://oilersnation.com/2018/07/10/comparing-nhl-player-contracts-based-on-city/</a> (Oiler's pay the highest cap hit in the league (McDavid 12.5m)... Surely they know about this Canadian tax loophole too? And this article was written 4 days after yours...

"Tavares makes $11 million in Toronto and his net salary is $5.145 million, while Kucherov’s $9.5 million salary in Tampa Bay nets him $5.781 million. Kucherov still has a higher net salary playing in Tampa Bay, even though Tavares gets paid $1.5 million more in Toronto."

"Yes, it is true they get taxed on road games, so Kucherov will get taxed more on road, but that is only half his games and doesn’t really make up the difference in gap. It lessens it, yes, as I wrote above, but TB still has a big advantage over Toronto for instance."

<a href="https://www.bna.com/nhl-players-salaries-n73014470580/" rel="nofollow noreferrer noopener" target="_blank">https://www.bna.com/nhl-players-salaries-n73014470580/</a>
<a href="https://hockey-graphs.com/2019/01/08/how-much-do-nhl-players-really-make-part-2-taxes/" rel="nofollow noreferrer noopener" target="_blank">https://hockey-graphs.com/2019/01/08/how-much-do-nhl-players-really-make-part-2-taxes/</a>
<a>chrome-extension://cbnaodkpfinfiipjblikofhlhlcickei/src/pdfviewer/web/viewer.html?file=https://www.taxpayer.com/media/CTF-HomeIceDisadvantage.pdf</a>
<a href="https://thehockeywriters.com/inevitable-for-vegas-salary-cap-and-taxes/" rel="nofollow noreferrer noopener" target="_blank">https://thehockeywriters.com/inevitable-for-vegas-salary-cap-and-taxes/</a>

I'm no tax expert but I sure know how to point out contradictions...

These are the questions I developed from reading the original article (the only one I could find until you linked me to another one) <a href="http://www.mondaq.com/canada/x/779510/tax+authorities/Auston+Matthews+Shoots+And+Scores+Tax+Savings" rel="nofollow noreferrer noopener" target="_blank">http://www.mondaq.com/canada/x/779510/tax+authorities/Auston+Matthews+Shoots+And+Scores+Tax+Savings</a>

1. Why does the article use his first-year salary of 15.9m rather than his 11.634m cap hit? (makes "running some quick numbers" very confusing)

2. Why does the article LIE about the percent of games Matthews plays in Canada?? "(A quick glance at the team's schedule tell us this amounts to approximately 73 per cent of players' salaries.)"
I counted myself and the Leafs play 33 times in the U.S. this season. 59.7%. NOT 73%... They plug in 73% for all their "numbers" examples, which immediately is incorrect info and makes me want to stop reading any further into this sketchy article... But I continued reading and continued to find more BS.

3. "Why is residency important? Sticking with the Maple Leafs example, players who are residents of either Canada or the United States are taxed on their entire salary in their home country."
If this is so, what about players that are residents in Sweden, Finland, Russia, or other foreign countries? How do those players get taxed?

4. "Those who are considered residents of the U.S. must also pay tax in Canada – but only to the extent of time on Canadian soil."
Matthews is an example, "he plays 73% of his games in Canada" (which is a LIE, he plays 59.7% in CA). How is he getting taxed less if he plays majority of games in the highest tax rate region?

5. "A signing bonus is defined as a sum of money paid to an employee as an enticement or incentive to join a particular organization or sign a new contract."
If that's so, how is his signing bonus BUILT INTO his cap hit? 93.7&amp; of his $58,170,000 is in signing bonuses... That's not an incentive, that's receiving your cap hit in other methods than base salary. If the quote is legit, signing bonuses would be in addition of the cap hit... Ex: getting a 1m signing bonus in addition to a 5m cap hit contract (6m total), would be incentive to pick that deal over a 5m cap hit w/o 1m bonus.

6. "The treaty provides that a signing bonus paid by a Canadian NHL team to a U.S.-resident player would be taxable in Canada – but that tax may not exceed 15 per cent of the gross amount of the payment."
Who ends up paying the taxes that Matthews avoided? The Canadian Government? Taxes don't just "disappear".

7. "Assuming the player's U.S. tax rate exceeds 15 per cent (it does, remember the 37-50 per cent), the bonus would effectively be taxable at a combined rate equal to his normal U.S. rates. And so, there is no Canadian tax cost disadvantage on the signing bonus amount."
Wtf is a "combined rate equal to his normal U.S. rates"? What are we combining? The bonus rate (15%)? If that's the case, how can you combine that rate with the normal U.S. rates (37-51%) and expect to get the same normal U.S. rate? If you combine the rates, you'd get a 51-66% U.S. tax rate. Which IS NOT "equal to his normal U.S. rates".

8. Since all the "numbers examples" that the article uses are falsely skewed... Let me make my own example with REAL analytics, that maintains the same "tax treaty claim" rules...

Matthews cap hit is 11.634m (fact). If 93.7% of his salary is paid via "signing bonus" (10.9m), and he gets taxed 15% in CA (plays 49 games in CA), then 6.5m gets taxed in CA over this season (15% = 975k).
Since the article is unclear regarding "the bonus would effectively be taxable at a combined rate equal to his normal U.S. rates" (LOL wut), I'll assume they mean that U.S. tax rates stay the same.
In this case, since 6.5m got taxed in his 49 CA games, that leaves 4.4m to be taxed in his 33 U.S. games. Based on the tax rates of where his 33 U.S. games take place @, the average tax rate is 43.31% (43.31% = 1.905m). Add that to the 975k and you get 2.88m.

Now for the base salary (735k). We know this number is getting taxed @ the real NHL tax rates. Since 41 games are in Toronto (53.09%) &amp; 33 in the U.S (43.31%), the remaining 8 CA games tax rates avg is 50.87%. Altogether, the average of those 3 tax rates (with the 41/33/8 factor included) is 48.94% (48.94% = 360k). Add the 360k to the 2.88m.

So, according to my math Matthew's would pay roughly 3.24m in taxes AAV, and he'd pocket 8.394m in post-tax earnings. This is better than the 5.444m (post tax earnings) that the tax calculator shows, &amp; it's also better than Tampa's post tax earnings (7.364m) when calculating the same 11.634m cap hit.

9. If we do the same math for his 15.9m first-year salary, 15.91m x .597 (CA game rate) x .15 (signing bonus tax %) = 1.425m in CA taxes paid.
Now U.S. taxes:....................................................................... 15.91m x .403 (US game rate) x .4331 (US tax % avg) = 2.777m in U.S. taxes paid.
Now 700k base salary taxes:................................................. 700k x .4894 (avg tax rate) = 343k
Add those up and you get 4.545m paid in taxes his first year... Not 2.5m like the article claims...

SOOOO bottom line is this: Clearly the math was completely incorrect from the article. But regardless, after doing my own math... The "tax treaty claim" does indeed leave Matthews with less taxes paid than the tax calculators will show... But my first 7 questions are legit and need answers in order for this whole "claim" to even be possible.
Forum: Armchair-GMMar. 5, 2019 at 9:38 p.m.
<div class="quote"><div class="quote_t">Quoting: <b>pharrow</b></div><div>Points focus is like many players, on getting paid. It's a job. They have a limited amount of time to make money. Why people confuse that because they like a player is beyond me. Every athlete knows it's a cash grab. No agent is telling them to look at the Tampa history of what they pay their players. A players value is what a players value is. Regardless of taxes. If McDavid played in TB he would have still signed the largest contract ever regardless of the tax situation. Because that's his value and he was being severely underpaid as a rookie. Much like Point is. You got your bargain years in. He's proved he's worth the money.
It doesn't matter what the tax rate is. His value is his value. If he makes out better after taxes so be it. But no one knows the tax future and that's why it's bad financial advice to say he should take less because of the taxes. For all you know, he'll get slapped with a huge tax in 3 years in a state that is turning blue. Then what? He took less and pays the taxes.
What ever his value is worth he will sign for that. Much like Lebron did. Maybe after Point makes his money he will go chasing rings. But right now, he's not wealthy and he needs the contract to pay out to secure his future.</div></div>

I understand the reasoning behind your opinion, but history &amp; myself simply disagree with you. Maybe one day a bolt player will have this mindset, but so far we have no examples of such in our franchise's history. I've dug deep asf into the analytics regarding this topic. After comparing Point's projected career stats &amp; accomplishments for when he'll sign this off-season, with Stamkos' resume the day he signed his first 7.5m x 5 yr deal in 2011... Stamkos' resume is irrefutably more appealing... His cap hit % was 11.6%. In today's NHL, the avg cap hit % for the best expiring ELC players is 10% tops, unless you're on a high tax rate team Like Matthews, McDavid, Eichel, (this isn't a coincidence)... PLUS, not only did Stamkos have more goals and ppg when he signed, he was able to accomplish that during an era when there was a league average of 5.32 total goals/game. As of this year, the league average is 6.02 total goals/game...

I could keep going on but it's not worth it, it's not like I NEED to prove analytics to you... It's not even that hard to look into, there's so many websites that you can use to look into trends, stats, etc.
Forum: Armchair-GMMar. 5, 2019 at 6:43 p.m.
Thread: Karlsson UFA
<div class="quote"><div class="quote_t">Quoting: <b>tesau315</b></div><div>First of all, I really appreciate the dedication and research you did on this subject. It is nice to see that there are still people out there who would rather do the research themselves then let others tell them what is right and wrong.

Secondly, I will try and answer your points one by one, but some I will combine into one answer, just so you know.

1. What article are you referencing, as I would very much like to read it. From what I can gather from your what you are saying, this article seems to either be written by someone who never took math in high school, or by someone who writes for the Maple Leafs, which would make the first point also true.

2. I cannot speak for the article as I neither wrote it nor have I read it.

3-4. Players in the NHL get taxed in Canada for the games played in Canada and taxed in the US for games played in the US, regardless of nationality or residency. If this article is specifying anything different, then it should be discredited right away, as it is wrong.

5-8. So signing bonuses are different in the NHL. The NHL and NHLPA define a signing bonus as a portion of a players yearly salary that is to be paid out in a lump sum on July 1st of the playing year. It is more like an advance on salary rather than a signing bonus as stated. So for Tavares, his salary for the 2019-20 season is $15.9 million, but he receives his almost $15 million dollars of it on July 1st as a "signing bonus". The other $900,000 and change he gets as his salary throughout the remainder of the season. Signing bonuses in the NHL, and not just Canada from what I understand, can be paid to any organization that the players deems as well, not just themselves, as I said before. So players like Matthews, and Tavares have Incorporated either their names or a business that they then get their signing bonuses paid to, at a much lower tax rate than if they had it paid as personal income tax. This also eliminates the ability for the US to tax it as it was paid to a Canadian business, and not the player personally, as the US can only tax that players personal income made in other countries, and vice versa for players who play in the US and live in Canada. Essentially, when a player defers their signing bonus to a business, it falls under the small business tax code and not the personal income tax code, at least here in Canada.

Also, I have no clue what the combined tax rate they are talking about is.

9. Your math is correct and you have seem to have proven that article as grossly misleading. Just from what you have written here, I am excited to hopefully read this poorly written and researched article you have found. Also, US teams do offer signing bonus incentives, as many players have signing bonuses built into their contracts. It just seems like the amount is limited by the individual state's tax laws. I am going to do more research into that though.

Thanks for the thorough reply, it honestly made my day to read such a well researched and thought out observation on this subject.</div></div>

LOL I can't believe I forgot to add the link, my apologies. <a href="http://www.mondaq.com/canada/x/779510/tax+authorities/Auston+Matthews+Shoots+And+Scores+Tax+Savings" rel="nofollow noreferrer noopener" target="_blank">http://www.mondaq.com/canada/x/779510/tax+authorities/Auston+Matthews+Shoots+And+Scores+Tax+Savings</a>

I appreciate your intelligent &amp; respectful response. I wasn't sure I was going to get one with the length of my comment lol. I love researching analytics so it was easy for me to sniff out some flaws lol. I'm bout to go to the Lightning vs Jets game so I'll hyu with a more in depth response later tonight.
Forum: Armchair-GMMar. 5, 2019 at 2:12 p.m.
Forum: Armchair-GMMar. 4, 2019 at 11:16 p.m.
Forum: Armchair-GMMar. 4, 2019 at 9:23 p.m.
Thread: Karlsson UFA
<div class="quote"><div class="quote_t">Quoting: <b>tesau315</b></div><div>What do you mean it doesn't hold up? And you honestly think Karlsson won't want more than Doughty? And Stammer and Hedman took less because Yzerman is a great salesman, and was able to sell team success over personal gain to them.</div></div>

Yes I honestly think Karlsson is searching for a cup contender where he'd enjoy playing, before he looks for a possible extra mil elsewhere. It wasn't just Yzerman... Location, cup contenders, low tax rate were all factors.

Answer these questions for me regarding this "tax treaty loophole claim". BTW, the quotes in my questions are from the article.

1. Why does the article use his first-year salary of 15.9m rather than his 11.634m cap hit? (makes "running some quick numbers" very confusing)

2. Why does the article LIE about the percent of games Matthews plays in Canada?? "(A quick glance at the team's schedule tell us this amounts to approximately 73 per cent of players' salaries.)"
I counted myself and the Leafs play 33 times in the U.S. this season. 59.7%. NOT 73%... They plug in 73% for all their "numbers" examples, which immediately is incorrect info and makes me want to stop reading any further into this sketchy article... But I continued reading and continued to find more BS.

3. "Why is residency important? Sticking with the Maple Leafs example, players who are residents of either Canada or the United States are taxed on their entire salary in their home country."
If this is so, what about players that are residents in Sweden, Finland, Russia, or other foreign countries? How do those players get taxed?

4. "Those who are considered residents of the U.S. must also pay tax in Canada – but only to the extent of time on Canadian soil."
Matthews is an example, "he plays 73% of his games in Canada" (which is a LIE, he plays 59.7% in CA). How is he getting taxed less if he plays majority of games in the highest tax rate region?

5. "A signing bonus is defined as a sum of money paid to an employee as an enticement or incentive to join a particular organization or sign a new contract."
If that's so, how is his signing bonus BUILT INTO his cap hit? 93.7&amp; of his $58,170,000 is in signing bonuses... That's not an incentive, that's receiving your cap hit in other methods than base salary. If the quote is legit, signing bonuses would be in addition of the cap hit... Ex: getting a 1m signing bonus in addition to a 5m cap hit contract (6m total), would be incentive to pick that deal over a 5m cap hit w/o 1m bonus.

6. "The treaty provides that a signing bonus paid by a Canadian NHL team to a U.S.-resident player would be taxable in Canada – but that tax may not exceed 15 per cent of the gross amount of the payment."
Who ends up paying the taxes that Matthews avoided? The Canadian Government? Taxes don't just "disappear".

7. "Assuming the player's U.S. tax rate exceeds 15 per cent (it does, remember the 37-50 per cent), the bonus would effectively be taxable at a combined rate equal to his normal U.S. rates. And so, there is no Canadian tax cost disadvantage on the signing bonus amount."
Wtf is a "combined rate equal to his normal U.S. rates"? What are we combining? The bonus rate (15%)? If that's the case, how can you combine that rate with the normal U.S. rates (37-51%) and expect to get the same normal U.S. rate? If you combine the rates, you'd get a 51-66% U.S. tax rate. Which IS NOT "equal to his normal U.S. rates".

8. Since all the "numbers examples" that the article uses are falsely skewed... Let me make my own example with REAL analytics, that maintains the same "tax treaty claim" rules...

Matthews cap hit is 11.634m (fact). If 93.7% of his salary is paid via "signing bonus" (10.9m), and he gets taxed 15% in CA (plays 49 games in CA), then 6.5m gets taxed in CA over this season (15% = 975k).
Since the article is unclear regarding "the bonus would effectively be taxable at a combined rate equal to his normal U.S. rates" (LOL wut), I'll assume they mean that U.S. tax rates stay the same.
In this case, since 6.5m got taxed in his 49 CA games, that leaves 4.4m to be taxed in his 33 U.S. games. Based on the tax rates of where his 33 U.S. games take place @, the average tax rate is 43.31% (43.31% = 1.905m). Add that to the 975k and you get 2.88m.

Now for the base salary (735k). We know this number is getting taxed @ the real NHL tax rates. Since 41 games are in Toronto (53.09%) &amp; 33 in the U.S (43.31%), the remaining 8 CA games tax rates avg is 50.87%. Altogether, the average of those 3 tax rates (with the 41/33/8 factor included) is 48.94% (48.94% = 360k). Add the 360k to the 2.88m.

So, according to my math Matthew's would pay roughly 3.24m in taxes AAV, and he'd pocket 8.394m in post-tax earnings. This is better than the 5.444m (post tax earnings) that the tax calculator shows, &amp; it's also better than Tampa's post tax earnings (7.364m) when calculating the same 11.634m cap hit.

9. If we do the same math for his 15.9m first-year salary, 15.91m x .597 (CA game rate) x .15 (signing bonus tax %) = 1.425m in CA taxes paid.
Now U.S. taxes:....................................................................... 15.91m x .403 (US game rate) x .4331 (US tax % avg) = 2.777m in U.S. taxes paid.
Now 700k base salary taxes:................................................. 700k x .4894 (avg tax rate) = 343k
Add those up and you get 4.545m paid in taxes his first year... Not 2.5m like the article claims...

SOOOO bottom line is this: Clearly the math was completely incorrect from the article. But regardless, after doing my own math... The "tax treaty claim" does indeed leave Matthews with less taxes paid than the tax calculators will show... But my first 7 questions are legit and need answers in order for this whole "claim" to even be possible.

Evidence for this claim being true:
My own personal math example (if it correctly follows the rules of the treaty), does show less taxes being paid by Matthews.

Evidence for this claim being BS:
There is only 1 article I can find that talks about this.
That 1 article is full of contradictions.
The article is Canadian (biased).
The highest paid NHL players are on high tax rate teams... Coincidence?
At most, maybe 10% of people on Capfriendly have mentioned this claim. Why aren't more people aware?
Nobody in that 10% has been able to answer the questions I linked to the article.
etc................

LAST QUESTION: If this is true, what would stop U.S. teams from doing the same thing &amp; start paying their players 90%+ in signing bonuses also? U.S. teams should be able to benefit even more than the article is suggesting CA teams are benefiting.
Forum: Armchair-GMMar. 4, 2019 at 5:31 p.m.
Forum: Armchair-GMMar. 4, 2019 at 5:00 p.m.
Thread: Karlsson UFA
Forum: Armchair-GMMar. 4, 2019 at 4:34 p.m.
Thread: Karlsson UFA
Forum: Armchair-GMMar. 4, 2019 at 3:58 p.m.
Forum: Armchair-GMMar. 4, 2019 at 3:50 p.m.
Forum: Armchair-GMMar. 4, 2019 at 2:48 a.m.
Forum: Armchair-GMMar. 4, 2019 at 12:59 a.m.
Forum: Armchair-GMMar. 4, 2019 at 12:25 a.m.
Forum: Armchair-GMMar. 3, 2019 at 11:36 p.m.