Brief summary first. A poker "friend" and I decided to trade 10%. He goes on to to win 42k, I bubble. About an hour before I bust he looks over at me from the next table and says "Whenever I trade %s we always hold out 25% of the prizepool (for taxes) before I pay out the % I will owe you." I reply that "I did not agree with that and if that was his plan he should have mentioned it before hand, you can not bring up the fine print after the contract has been signed".

So the following day after he won we were discussing how much he owes me. He tries to go back to his -25% argument. I say if you do that I will feel slighted. I think he is way out of line, but we compromise. He says I pay the taxes on my portion of the winnings. I believe he has already been issued the w2g for the full amount.

Here comes my question. Since he has already been issued the w2g for the full amount, what (if any) forms can we fill out to show that $4,200 of that money was actually paid to me?

I really appreciate any help on this matter.

IRS form 5754

/thread

Too late to use IRS form 5754, but read the US Taxes sticky in this forum to find the right answer.

Im sorry, but I could not find the answer I was looking for in the sticky. If you could assist me further it would be greatly appreciated.

its under this section:
"Q: How do taxes work if I am staked, or if I stake another player?"