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A Tax Shelter for the Rich Sports Fan With 500 Hours to Spare

  • Buying a slice of a team can generate significant paper losses
  • IRS requirements met by watching games, following sports
of the New York Yankees against the Philadelphia Phillies in Game Six of the 2009 MLB World Series at Yankee Stadium on November 4, 2009 in the Bronx borough of New York City.
Photographer: Al Bello/Getty Images

Why would anyone spend $24 million to buy a 1 percent stake in the New York Yankees? Minority ownership seems like a lose-lose proposition: A lot of money for very little power. For wealthy sports fans, though, it’s cool -- and can be one heck of a tax shelter.

Owning a piece of a team can create the kind of on-paper losses that cut a wealthy owner’s bill to the Internal Revenue Service. A sports team “spits out losses that offset other income," says Murray Solomon, a tax partner at the accounting firm EisnerAmper in New York City. “Then at the end of the day, you can sell the investment and make money.”