I couldn't make it through all the misinformation to see if the correct info is here yet but my accounting degree at Fighting with people in TikTok comments U has led me to some research.
1. Dodgers must show proof every year that payments are made to a legal annuity (call this the Madoff rule), which would likely be Guggenheim. So they will pay $48M, or whatever that number was, every year of the contract. Essentially the deal is 10 years @ $50M per or so for them. thus this is their cap hit.
there are currently 75 players receiving deferred money in the MLB.
2. For Ohtani he chose to get his deferred payments over 10 years likely because of this U.S. tax law.
Residence can affect overall tax status
Your federal tax obligations for deferred compensation will be the same regardless of where you live when you receive the money. However, where you live could have a significant impact on your state tax liability—if your payments are structured the right way.
"Generally, deferred compensation is taxable in the state where the employee worked and earned the compensation, regardless of whether the employee moves after retirement," says David Walters of Palisades Hudson Financial Group in Portland, Oregon.
"However, if the employee has elected to take the deferred compensation payments over a period of 10 years or more, the deferred compensation payments are taxed in the state of residence when the payments are made." This can make a big difference if you move to a state that has no state income tax, such as Florida, Washington or Nevada, or at least to one with a lower income tax than where you earned the money. source https://turbotax.intuit.com/tax-tips/tax-payments/strategies-for-managing-your-tax-bill-on-deferred-compensation/L83l5ousH
some misinformation I have read. He will still pay the larger portion of tax which is Federal Tax. Moving only avoids state tax (I read $4.7M per year but have not verified this). He cannot move back to Japan to avoid this. He would have to have residency in another state. As I believe Dick said, his agents know how to work around this.
The jays could do this. However there would be zero tax advantage to the player as our laws state that you pay your taxes based on where the income was earned.