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I'd like to understand how the luxury tax calculation works. I know it is supposed to be 50% of the player expenses over $90 million so I assume that it does not include staff salaries. Does the calculation just take the year-end amount from the player expense line subtract $90 million and if positive take 50% of that amount?
This would be the simplest but it seems to me that there should be an adjustment for cash sent/received in trades. The sending team should have the amount sent added to the player expense line, while the receiving team should have the amount deducted as long as he added it to current cash (or in other words used it to reduce current player expense). If the receiving team used the cash to reduce future salaries then he would receive no current-year adjustment to player expenses since he will receive a futute benefit for the cash received.
Is this the way it works?
This would be the simplest but it seems to me that there should be an adjustment for cash sent/received in trades. The sending team should have the amount sent added to the player expense line, while the receiving team should have the amount deducted as long as he added it to current cash (or in other words used it to reduce current player expense). If the receiving team used the cash to reduce future salaries then he would receive no current-year adjustment to player expenses since he will receive a futute benefit for the cash received.
Is this the way it works?
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