Is Donald Sterling a racist or just a savvy tax planner?

Could Forced Sale of the L.A. Clippers Save Donald Sterling $323 Million in Taxes as § 1033 Involuntary Conversion?

By Paul Caron, Pepperdine University School of Law

If Sterling had voluntarily sold the team for $1 billion, he would have owed about $200 million in federal income tax and another $123 million in California state income tax. But thanks to a tax law that applies only to forced sales or other “involuntary conversions,” Sterling’s profits may all be tax-free.

 

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