MLB

Yankees Will Save Over $300 Million Due To Lack Of Estate Tax

For both the Yankee family and much of the baseball world, the death of long-time owner George M. Steinbrenner III is nothing short of a tragedy.  Yet, as terrible as this may sound, current federal economic policy dictates that Steinbrenner’s passing may actually leave the Yankees catching a break.

A $328 million tax break, to be exact.

Steinbrenner’s death comes during an unplanned year-long gap in the federal estate tax–the rate of which was at 45% in 2009–and, moreover, at a time when political stalemate has prevented the replacement of the former policy.  Thus, as Forbes Magazine has valued Steinbrenner’s estate at $1.1 billion, the Steinbrenners would have been on the hook for approximately $500 million, a $500 million they may now spend elsewhere.

Now, as STATS LLC and the AP point out, the Steinbrenners don’t avoid taxation entirely.

“They will still have to ultimately pay a capital gains tax if and when assets are sold. And due to a change in tax law this year, the tax would be applied to the amount by which the assets have appreciated since Steinbrenner acquired them.

“Even if the Steinbrenners sold the assets right away, the top capital gains tax rate is 15 percent. Worst-case scenario, depending on how much the assets appreciated after Steinbrenner acquired them: a $165 million tax bill.”

Regardless, as $165 million is still considerably less than $500 million, the Steinbrenners will receive quite a tax break.

As attorney and estate planner Jack Nuckolls said: “If you’re super-wealthy, it’s a good year to die.”

For those who consistently condemn the Yankees business model and lament the organization’s ability to ‘buy championships,’ the news that the rich will get richer will come only as a kick to the chest.

But, certainly, for Yankees fans, the knowledge of their financial good fortune will help ease their pain.

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