By the numbers

Our colleague Paul Caron at TaxProf Blog has also noted the New York Times piece on selling athletes’ numbers.  For those who want to use it as a problem in a drafting or negotiation course, it turns out there are tax consequences.

Our (admittedly) tax-phobic view of the situation suggests that the question whether the sale proceeds are ordinary income or capital gains depends on whether the individual player has a contractual right to the numbers, which are usually assigned at the discretion of the club.