NFL star's massive tax bill highlights problems with BTC salaries
NFL Star Odell Beckham Jr's (OBJ) decision to take his $750,000 salary in Bitcoin appears to have cost him dearly due to the market crash after he signed the deal. Owing to the vagaries of cryptocurrency tax laws and current prices, OBJ is estimated by some to have made 61% less than if he’d taken his salary in fiat.
The loss has highlighted the tax complications from receiving a salary or yield in cryptocurrency as crypto investors have to pay tax on the amount it's worth when it was received, not what it's worth when they lodge their tax return.
On Nov. 12 last year, OBJ signed a one-year- deal with the Los Angeles Rams worth $750,000. In a promotional Twitter post partnered with CashApp, OBJ announced that he would be receiving 100% of his $750,000 yearly salary in Bitcoin (BTC).
It's a NEW ERA & to kick that off I'm hyped to announce that I'm taking my new salary in bitcoin thanks to @CashApp. To ALL MY FANS out there, no matter where u r: THANK YOU! I’m giving back a total of $1M in BTC rn too. Drop your $cashtag w. #OBJBTC & follow @CashApp NOW pic.twitter.com/ds1IgZ1zup
At the time, Bitcoin had been breaking new all time highs and just two days before OBJ signed the Rams deal, it reached its highest price ever of $69,044. Unfortunately for OBJ, Bitcoin is now down 46% from that high, currently worth $36,972.
According to sports business analyst and senior executive producer for The Action Network Darren Rovell, OBJ’s decision to take his full salary in Bitcoin may not have been the brightest idea.
Rovell stated that OBJ’s entire salary is now worth only $413,000 compared to the original $750,000.
Once both Federal and State taxes are accounted for, at a cumulative rate of 50.3% Odell will only have earned $35,000
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