LA Clippers owner Donald Sterling could score huge tax benefits if the NBA carries through with its threat of forcing him to sell the team.
Sterling, whose Clippers are valued at up to $1 billion, could invoke Section 1033 of the US tax code and avoid paying the $323 million he would have owed on a sale, tax experts say.
The federal tax provision calls for a special allowance for anyone who has “involuntarily converted” assets. This section is usually cited by people who lose property to a natural disaster or under eminent domain.
But there’s a catch.
To completely skate tax-free, a Clippers-less Sterling would have to reinvest all the proceeds into a “like-kind” venture — such as another NBA team, or possibly another sport’s team or entertainment venture — within two years.
“Because the NBA and Clippers saga has not yet played out, it is premature to decide whether this treatment would apply,” tax lawyer Bradley Marsh, chairman of Taxation Section of the California Bar, told The Post.
“I certainly wouldn’t rule it out, though.”