How Shaquille O’Neal ‘escaped the IRS’ by paying $1.25 million salary to parents 

Shaquille O'Neal has amassed a $500 million net worth through smart investing starting from the time he played in the NBA.

How Shaquille O’Neal ‘escaped the IRS’ by paying $1.25 million salary to parents 

Shaquille O'Neal paid his parents $1.25 million in salary to avoid the IRS

Shaquille O’Neal is known for three attributes. One is for being the most dominant player in basketball, second is his larger-than-life persona that also brings along a certain degree of warmth. Lastly, he became a successful businessman who has amassed a lot after retiring.

In his successful business journey, he has had many hits and misses. On one hand, his early investments in Google and other brands gave his total net worth a massive boost. On the other hand, he has also had some failed investments.

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While doing all this, he had an acute sense of finance and his ability to look at investments as a tool to help society. A little more than a couple of years ago, Shaquille O’Neal was on the DrinkChamps podcast with hosts N.O.R.E. & DJ EFN. While talking about his investments, he revealed one of his tricks to avoid taxes.

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First thing I did was incorporate Shaq. I put my mom on salary and put my dad on salary. I got them an office and got them a car.

Shaquille O’Neal said

He went on to add that he gave his father a salary of $500,000 for the year. He then gave his mother, Lucille O’Neal, a salary of $750,000 for that year. After he said this, DJ EFN asked if this was to avoid paying the IRS taxes on that amount, to which O’Neal agreed by shaking his head.

Shaquille O’Neal declined a lucrative Starbucks investment

He learnt that trick by reading the book The Dummies’ Guide to Starting Your Own Business. Other than the book, he learnt business from the likes of Amazon founder Jeff Bezos. He embraced Bezos’ method of investing in companies that helped change lives.

Some of them are close to his heart, such as his investment into Krispy Kreme donuts and Papa Johns’ pizza outlets. Others were more of a necessity, such as his now famous investment in the home security company Ring, which ended up netting him a good return.

However, that approach also cost him a lucrative investment opportunity. Then Starbucks CEO Howard Schultz approached Shaquille O’Neal to invest in the company. The Diesel declined as he did not align with that investment, believing that black people don’t drink coffee.

That investment instead went to another NBA legend Magic Johnson. Johnson sold his stock in 2010 to net nearly $100 million. Had that been O’Neal, he would have added to his current $500 million net worth.