May 1, 2014 – Tax attorney Gary Slavett was interviewed by the Los Angeles Times regarding the controversy surrounding Donald Sterling and the Los Angeles Clippers. Gary Slavett opined that if Donald Sterling were forced to sell the Clippers for an estimated $1 billon, his tax liability would likely exceed $360 million. This assumes that Sterling purchased the Clippers for $12 million, resulting in a capital gain of $988 million. The federal capital gains tax rate is 20%, plus the new 3.8% net investment income tax (Internal Revenue Code Section 1411), for a total of 23.8% federal tax. The California rate is $13.3%. Therefore, federal and state taxes will total 37.1% of the capital gain.
To read the Los Angeles Times article click here.