Owning the Lakers would provide billionaire investor Joshua Kushner with an iconic sports franchise — and a ‘powerful tax shield’

Thrive Capital founder Joshua Kushner and former Disney CEO Bob Iger stunned the sports world this week with a deal to buy the Los Angeles Lakers for a record $12.5 billion.

If approved, the acquisition would provide the new owners with an iconic NBA franchise that boasts 17 championships as well as ties to legends like Magic Johnson, Kareem Abdul-Jabbar, Kobe Bryant, Shaquille O’Neal, and LeBron James.

But ownership of the Lakers would also provide tax benefits.

In fact, sports teams have long been considered great tax shelters for wealthy individuals .

That was not lost on Ram Ahluwalia, founder of Lumida Wealth Management, who said Kushner’s Lakers deal has nothing to do with sports teams as an asset class.

“It’s a powerful tax shield,” he posted on X on Saturday.

“My guess is he is preparing to offset a boatload of carried interest income.

If you own a sports team, done correctly, you can get a deduction against income.

The goal in acquiring a sports team is to setup a ‘non-passive’ deduction.” Ahluwalia pointed out that Kushner is likely facing big gains from his holdings in SpaceX, OpenAI and Stripe.

Meanwhile, tax deduction benefits from owning a team are more favorable than owning real estate.

He added that Warren Buffett mastered the art of depreciating goodwill expenses from high-quality brands like See’s Candies and Dairy Queen that are owned by Berkshire Hathaway .

Similarly, when Mark Cuban was the majority owner of the Dallas Mavericks NBA franchise, he handled it very well, according to Ahluwalia.

“He also grew the equity value at the same time.

Net net he transformed high income tax into lower taxed capital gains.