Issues Arise With NFL’s Star Bitcoin Salary
The idea of collecting salaries in crypto is a lofty one that many people have embraced as part of the drive to make crypto mainstream. But there are issues with that decision, as Odell Beckham Jr (OBJ) tax reports reveal.
Bitcoin Payment Affects OBJ Salary
The NFL star decided to take his $750,000 salary in Bitcoin last year. But the massive fall in crypto value means he’s earning 61% less than he would have after taxes if he had opted for fiat.
Sports analysts business analyst, Darren Rovell, tweeted the report, pointing out that it provides a cautionary tale for everyone wishing to take their salary in Bitcoin.
The amount of people applauding players changing their salary into Bitcoin as if they were heroes has been comical.
Rams WR Odell Beckham Jr., at least in the moment, provides a cautionary tale. pic.twitter.com/uW0QDdJrYy
— Darren Rovell (@darrenrovell) January 23, 2022
OBJ signed a one-year deal worth $750,000 with the Los Angeles Rams last year. In a promotional tweet announcing the deal, he stated that he’d receive all his salary in Bitcoin courtesy of CashApp.
At that time, Bitcoin was trading at around $69,000. Since then, the token has fallen by more than 40% and currently trades at less than $40,000. This means that the $750,000 deal is now worth around $400,000.
According to Rovel, once the 50.3% Federal and California State tax rule is applied, OBJ’s salary for his contract with Rams will total $35,703 which is a far cry from the $90,000 he would have earned if the salary was in fiat.
Crypto Community Reacts
However, not everyone agrees with Rovel’s take. According to Bitcoin Enthusiast and Sports business analyst Joe Pompliano, Rovel assertions don’t represent facts.
He stated that NFL salary is actually paid weekly and not upfront annually. He further stated that OBJ earned 7-figures from the marketing with CashApp. This is more than what he got paid on the Rams deal.
I know this fits your narrative, but it's simply not true.
1. The deal was announced on Nov 22nd, not Nov 12th.
2. NFL players get paid weekly, not 100% upfront.
3. Cash App paid him 7-figures in marketing money — that's more than his entire contract with the Rams.
— Joe Pompliano (@JoePompliano) January 23, 2022
While Rovel’s take might not be 100% accurate, it brings to the fore the challenges of earning in crypto. Unfortunately, this isn’t the first time earning crypto will cause significant tax issues.
Stories like this are quite common during crypto winters, and one can only expect more. The common tax rule is to use the value of crypto assets at receipt to tax them. But this can be problematic if the value falls, leaving investors to pay much more than they receive for taxes.
This article was originally posted on FX Empire