Thank you for a very interesting question. I need to know. When you purchase seat licenses, are yourse the exclusive rights? If you do not exercise the right, are the seats sold to others? or if you do not exercise the right, are they then sold to someone else?
These sound like you mean by seat license, that you have an option to buy. Can you verify that?
Hi. You are right that these are an option to buy. If I don't exercise the option, then the team will sell the PSL to someone else. The only slight tweak to this is that the PSL is something I can sell myself if I decide I don't want them any more. Most teams have PSL markets where you can buy and sell PSLs, or you can sell them on Ebay or some other market. The PSLs can be quite expensive. For example, the PSL I am buying with the Dallas Cowboys will cost me $14,000. Thus, I would always prefer to sell them rather than let them go if I decide not to purchase the seats in a given year. Good question!
These assets are not depreciable assets. They are intangibles that you can capitalize.
From the IRS website:
Intangible assets purchased after August 10, 1993, including agreements not to compete, franchise rights, business licenses, and patents, copyrights, trademarks, trade names, business goodwill, and going concern value that are acquired as part of the acquisition of a substantial portion of a business, must be amortized over the course of 15 years. (or shorter period if they have defined age)
When you sell the seats, then you may incur a capital gain or loss and report them on schedule D.