Andre Iguodala is a baller. There’s no doubt about it. He also knows a little something about taxes.
Andre Iguodala, Russell Westbrook, and Josh Smith were on the FOX Business Channel to promote the release of NBA2K11. The host of the show strayed away from basketball questions and ambushed the pro ballers with some tax questions.
At one point, the host asked Iguodala if he owned Apple stock. Iguodala confirmed that yes, indeed he did. As of the date of the interview the stock was trading at $290.35. Iguodala says he bought the stock at $262, roughly a $28 profit per share. As the host points out, if Iguodala sold the stock on the day of the interview, half of the profit per share ($14) would go to Uncle Sam. To this, Iguodala responded, “Yea, after a year though then taxes are lower.” Iguodala is right on the money!
See, if you buy stock or any other capital asset and hold onto it for longer than one year and sell it, any profit is taxed at a lower capital gains tax rate. If you buy stock and then sell it before a year is up, you are taxed at ordinary rates. Iguodala knows that if he holds onto his Apple stock for a period of longer than one year and then sells it, he’ll save more in taxes than if he sold it before a year was up. Very impressive.
Mad props to Iguodala for knowing that short term capital gains are taxed at ordinary rates. Also, mad props to his accountant for educating his client. You can see the video of the interview below. Hat tip to Daily Thunder.