Athletes need to be cautious about the characterization of income, especially when the income is earned in a foreign jurisdiction This is true for a variety of decisions from the timing of receiving income, to how the taxing authorities will ultimately characterize a payment. This is certainly the case with payments made to an athlete where there will be a distinction as to whether the payment is personal service income or a royalty fee. The tax consequences of the characterization are significant. Duane Morris partner Thomas R. Wechter of our Chicago office provides insights in this recent article.

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