When Dwight Howard first demanded a trade in December, the Orlando Magic gave him permission to speak with the New Jersey Nets, Dallas Mavericks and Los Angeles Lakers. While Howard dodges all questions related to his future, it seems that the 26-year-old is zeroing in on the Nets.

The Lakers have already been informed that Howard won’t sign a long-term deal in Los Angeles, according to sources close to the situation. If the Lakers were to trade for Howard, he would opt out and test free agency. Howard’s interest in Los Angeles has always been overstated, mainly because he doesn’t want to follow in Shaquille O’Neal’s footsteps and he doesn’t want to go through another rebuilding process anytime soon. With Kobe Bryant and Pau Gasol in their thirties, Howard would be reaching his prime just as his All-Star teammates were declining.

Multiple sources believe Howard will force his way to the Nets and he certainly has leverage, just like Carmelo Anthony had last year when he would only agree to sign an extension with the New York Knicks. Howard wants to team up with Deron Williams, loves the idea of playing in Brooklyn and knows that the front office will involve him in the decision-making process.

This puts the Magic in a very difficult position. Their options are limited to trading Howard to New Jersey or hoping that a team is willing to acquire the superstar as a rental.

Then again, as RealGM’s Jarrod Rudolph points out, what’s stopping the Nets from being patient and waiting to sign Howard this summer? If New Jersey knows that Howard won’t sign a long-term deal anywhere else, they can hold onto their assets – such as Brook Lopez – and trade them in separate deals to surround Williams and Howard with more talent. Not to mention, if the Nets finish the season as currently assembled, they’ll likely have a top pick in this year’s draft, making their core even scarier.

Howard and Williams talked several times during the lockout and they went out to dinner in Orlando last month, one night before the Nets and Magic faced off on December 29. While the Nets have struggled this season and currently sit at 8-15, their record won’t affect Howard’s decision. He and Williams would form one of the best duos in the league and they wouldn’t have a problem attracting other talented players to Brooklyn.

A lot can change between now and July, but it certainly seems that New Jersey is Howard’s preferred destination.

Several Teams Interested in Smith: While Kenyon Martin is currently the hot free agent to return from China, J.R. Smith is also drawing interest from a number of teams.

The 26-year-old scorer has received interest from the New York Knicks, Los Angeles Lakers and San Antonio Spurs among others. He is having fun with his upcoming free agency, tweeting his fans, “I wonder what it’s like to play on Broadway?” and, “How many people does STAPLES seat?”

Smith will be an unrestricted free agent when he returns. He may decide to sign a one-year deal with a contender and then test free agency again in July, when more teams will have money to spend. Last year, Smith averaged 12.3 points, 4.1 rebounds and 2.2 assists coming off the bench for the Denver Nuggets.

Smith made headlines this week when he scored a CBA-record 60 points while coming off of Zhejiang’s bench. He didn’t play the entire first quarter and still managed to knock down 14 of 18 three-pointers and lead the team to a 122-110 win.

Bucks Searching for Big Man: The Milwaukee Bucks are searching for a big man. The Bucks waived Darington Hobson on Friday in order to open a roster spot. With Andrew Bogut sidelined eight-to-twelve weeks with a fractured left ankle, Milwaukee is searching for a short-term replacement.

The Bucks are looking at Kyrylo Fesenko and Joel Przybilla, according to sources. Fesenko is an unrestricted free agent who has three years of NBA experience. Przybilla lives in Milwaukee and started his career with the team.

Milwaukee has also contacted the New Orleans Hornets about Chris Kaman.

Hobson, 24, was originally selected by the Bucks with the 37th overall pick of the 2010 NBA Draft, but was waived prior to the start of the 2010-11 season. Hobson re-signed with Milwaukee as a free agent on Dec. 10, 2011, and appeared in five regular season games for the Bucks this season, tallying four points, three rebounds and six assists in 39 total minutes of action. He also spent two separate stints with the Fort Wayne Mad Ants of the NBA D-League where he averaged 10.6 points, 5.1 rebounds and 2.0 assists in eight games.

How Odom Beat the IRS: Lamar Odom may be struggling with the Dallas Mavericks, but he’s doing fine financially. Not only is Odom making $8.9 million this season, he also recently sued the Internal Revenue Service and won. Noah Sheer – the director of the Sports and Entertainment division at Cherry, Bekaert & Holland – describes how Odom was able to beat the IRS and what it means for other NBA players going forward.

In 2010, Lamar Odom, filed a lawsuit against the IRS for disallowing $87,000 in tax deductible expenses. These expenses were comprised of fitness and training costs, fines and penalties imposed by the NBA and interest assessed by the IRS.

 Fines and Penalties

Fines and penalties imposed by an employer are tax deductible. This is in contrast to a fine or penalty imposed by law enforcement, which is not tax deductible (IRS code section 162(f)). In short, employer imposed fines constitute ordinary and necessary expenses incurred in carrying on one’s own trade or business. Robert Leonard, Odom’s tax attorney, said the IRS completely threw in the towel on league-fine deduction issues.

SCORE: Odom 1 – IRS 0.

Training and Fitness Expenses

Next up… fitness and training expenses, of which Odom claimed in excess of $127,000 in tax deductions. In this case, Odom pointed to his NBA Uniform Player Contract which clearly stated that as a condition of his employment, he must maintain not only good physical condition, but sufficiently good physical condition to play skilled basketball. The cost in maintaining his current job skills (physical conditioning), as required in his employment contract are “ordinary and necessary” business expenses. Therefore, according to IRS code section 162, Odom’s training and fitness expenses are tax deductible.

SCORE: Odom 2 – IRS 0

The IRS does not like to lose. In this case, before a judgment was handed down, the IRS and Odom settled for roughly $8,000, or roughly 10 percent of what Odom was supposed to pay.

The tax code is confusing, it is difficult to read and constantly changing. Professional athletes focus much of their attention on finding the right agent and financial advisor and often overlook the need for a tax strategist (the accountant). There is a reason why some people pay less in taxes than others, and that reason is a competent tax strategist.

Famous American Judge Learned Hand wrote in 1937: “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

Reach out to Cherry Bekaert & Holland, L.L.P. this tax season or contact Noah Sheer at NSheer@CBH.com.

NBA Chats: There were two NBA chats today, starting with Yannis Koutroupis at 11 a.m. EST. I hosted my weekly chat at 1 p.m. EST. Be sure to check those out and submit your questions in these upcoming NBA chats.