Mark Walter stands to save approximately $425 million in taxes depending on when the NBA’s board of governors votes to approve his sale of the Los Angeles Lakers, according to tax calculations from CPA Robert Raiola.

The savings hinge on whether the sale closes before or after the one-year anniversary of Walter becoming controlling owner, which occurred at the end of October last year following league approval. Walter agreed to sell the Lakers to Joshua Kushner and Bob Iger for a reported $12.5 billion, with the transaction projected to yield roughly $2.5 billion in profit.

Long-term capital gains tax rules apply a 23.9 percent rate to assets held for more than one year, factoring in both the base 20 percent rate and an additional net investment income tax for high earners. Assets held for less than a year instead face the ordinary income tax rate, which climbs to 40.9 percent when including the net investment income tax.

Applying California’s 13.3 percent state income tax alongside the federal rates, Walter would owe roughly $930 million in taxes if the long-term rate applies, compared to approximately $1.36 billion under the higher short-term rate, according to Raiola’s calculations.

Raiola, director of the sports and entertainment group at PKF O’Connor Davies, cautioned that the actual transaction involves additional complexities beyond these estimates. Deductions, expenses and residency questions, including Walter’s reported Chicago residence, could all affect the final tax burden.

An ongoing federal investigation into Walter’s business holdings adds further complexity to the sale’s timeline and structure. That inquiry could prompt Walter, Kushner, Iger and the NBA to negotiate indemnification provisions if the legal issues expand to include his sports franchises.

The NBA’s board of governors has not yet set a date to vote on the Lakers sale.