Signing bonuses: cash vs. cap vs. luxury tax
Posted: Thu Dec 31, 2009 5:28 pm
Apologies if this is an old question...as a Jazz fan, much is being made about the recent Maynor/Harpring dump and how close it got us to the luxury tax threshold. That got me thinking (which is the first problem).
Paul Millsap was given a signing bonus as a result of the offer sheet extended to him by Portland, which Utah matched. I know that in terms of cash payout, Millsap gets a big front-loaded bump this year. I also know that for cap purposes, the bonus is actually spread out over the term of the contract.
But which number is used in luxury tax calculations for 2009-2010? The cash payout number, which includes 100% of the bonus? Or the cap number, which includes a pro-rated portion of the bonus? I'm curious if we're not actually as close to the tax threshold as it might appear.
Please answer in 3 pictures of hot celebrities or less. Thank you!
Paul Millsap was given a signing bonus as a result of the offer sheet extended to him by Portland, which Utah matched. I know that in terms of cash payout, Millsap gets a big front-loaded bump this year. I also know that for cap purposes, the bonus is actually spread out over the term of the contract.
But which number is used in luxury tax calculations for 2009-2010? The cash payout number, which includes 100% of the bonus? Or the cap number, which includes a pro-rated portion of the bonus? I'm curious if we're not actually as close to the tax threshold as it might appear.
Please answer in 3 pictures of hot celebrities or less. Thank you!