Luxury Tax Question after Trade
Posted: Mon Feb 25, 2008 12:48 pm
I have a question concerning the recent 11 player trade.
For Luxury Tax purposes: Do the salaries of Wallace & Smith get transferred to the Cav's Lux Tax calculations in full? Likewise, do the salaries of Hughes, Gooden, Brown & Simmons get transferred in full from Cavs to Bulls?
Or are the teams charged a pro-rated percentage - example: the salaries for 53 games of Wallace & Smith are charged to Bulls & the salaries for 29 games are charged to Cavs?
Either way, the Bulls will not pay Lux Tax & Cavs will - but the allocation rule will determine how much the Cavs actually would be charged.
If the first method is used, the Bulls overall salary total is about $1.5 million less than if the percentage method is used.
For Luxury Tax purposes: Do the salaries of Wallace & Smith get transferred to the Cav's Lux Tax calculations in full? Likewise, do the salaries of Hughes, Gooden, Brown & Simmons get transferred in full from Cavs to Bulls?
Or are the teams charged a pro-rated percentage - example: the salaries for 53 games of Wallace & Smith are charged to Bulls & the salaries for 29 games are charged to Cavs?
Either way, the Bulls will not pay Lux Tax & Cavs will - but the allocation rule will determine how much the Cavs actually would be charged.
If the first method is used, the Bulls overall salary total is about $1.5 million less than if the percentage method is used.