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Background: Prior to the 2017 Tax Cuts and Jobs Act [Pub. Law No. 115-97), most sports teams treated player and coach contracts (which are personal property) that could be taxed under IRC $1031 tax-free exchange rules when players and coaches were traded to another team. [When a team trades a player or coach, what really happens is that they exchange the contract to another team for a contract owned by the other team, with cash going one way or the other as boot". The player or coach just goes with the traded contract.] So, what is really happening is that they trade contracts and not people. The 2017 Act eliminated the use of $1031 for personal property. Something new has come along. Facts: Facts: Trade No. 1:In 2018, the Dallas Cowboys traded offensive lineman Otto Lennon to the Detroit Lions for their free safety Mercury Morton. No cash was involved. Trade No. 2: In 2018, the Cowboys also traded quarterback Quincy Brown to the New England Patriots in exchange for free safety Fred Smith. The Cowboys also paid New England $100,000.00 as part of the trade. Trade No. 3: In 2018, the Cowboys also traded wide receiver Warren Rich to the New York Giants in exchange for their place kicker, Paulo King. New York also paid the Cowboys $90,000.00 as part of the trade. Find the applicable new law covering these sports team trades, write a brief summary of how the safe harbor" works and the give a one or two line answer to the tax effects of Trades 1 through 3. Facts: Task: Hint: As you may discern from the dates, this is a fairly new concept. It is an administrative law source (as opposed to statute or judicial). Background: Prior to the 2017 Tax Cuts and Jobs Act [Pub. Law No. 115-97), most sports teams treated player and coach contracts (which are personal property) that could be taxed under IRC $1031 tax-free exchange rules when players and coaches were traded to another team. [When a team trades a player or coach, what really happens is that they exchange the contract to another team for a contract owned by the other team, with cash going one way or the other as boot". The player or coach just goes with the traded contract.] So, what is really happening is that they trade contracts and not people. The 2017 Act eliminated the use of $1031 for personal property. Something new has come along. Facts: Facts: Trade No. 1:In 2018, the Dallas Cowboys traded offensive lineman Otto Lennon to the Detroit Lions for their free safety Mercury Morton. No cash was involved. Trade No. 2: In 2018, the Cowboys also traded quarterback Quincy Brown to the New England Patriots in exchange for free safety Fred Smith. The Cowboys also paid New England $100,000.00 as part of the trade. Trade No. 3: In 2018, the Cowboys also traded wide receiver Warren Rich to the New York Giants in exchange for their place kicker, Paulo King. New York also paid the Cowboys $90,000.00 as part of the trade. Find the applicable new law covering these sports team trades, write a brief summary of how the safe harbor" works and the give a one or two line answer to the tax effects of Trades 1 through 3. Facts: Task: Hint: As you may discern from the dates, this is a fairly new concept. It is an administrative law source (as opposed to statute or judicial)

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