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Old 02-20-2014, 08:06 PM   #1
stranger
 
Join Date: Jan 2014
Posts: 7
WSOP witholding tax - Canadian

Hi,

I have searched a lot of threads about this but haven't come across a solid answer.

I had roughly $3500 withheld from a cash last year at the WSOP. How do I go about reclaiming this? Do I have to offset this amount by losses or should I just be able to get the whole thing back by filing with the IRS?

My particular case is a bit different. I was staked for the main event. I paid $1200 for 30% of winnings. I paid my backers in full and took the full brunt of the withholding tax.

They gave me a little slip called "form 1042-S". I imagine this will be used in reclaiming this money but have no idea how to go about doing so.

If anyone can offer specific advice or has done this before, the held would be immensely appreciated!
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Old 02-21-2014, 01:44 PM   #2
enthusiast
 
Join Date: Jan 2014
Posts: 61
Re: WSOP witholding tax - Canadian

Canadians have to request an Individual Taxpayer Identification Number and file Form 1040NR for the applicable tax year with the IRS.


Posts 7 & 8 in this thread are what you need to do. Ignore Post 6.

http://www.tripadvisor.com/ShowTopic...as_Nevada.html
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Old 02-21-2014, 02:30 PM   #3
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Re: WSOP witholding tax - Canadian

Are the offsetting losses only prior to your win? If I have 10k withheld can I sign up for two 5000$ tournaments and then claim those as losses if I fail to cash?
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Old 02-21-2014, 02:41 PM   #4
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Re: WSOP witholding tax - Canadian

Quote:
Originally Posted by chickens View Post
Are the offsetting losses only prior to your win? If I have 10k withheld can I sign up for two 5000$ tournaments and then claim those as losses if I fail to cash?
No, they do not have to be before. Gambling losses or Buy-ins can offset winnings only if they are all in the same year.

So, if you won $$ in January, you can offset that win with BI's until December 31.
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Old 02-21-2014, 06:00 PM   #5
stranger
 
Join Date: Jan 2014
Posts: 7
Re: WSOP witholding tax - Canadian

I'm still confused as how I should deduct the profit I sent to the people that staked me. I played a few other tournaments, but got taxed for 30% of 11.5k (~3.5k) and paid that whole thing. However, I should be able to deduct the amount paid out during staking. Does anyone know how this works?
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Old 02-21-2014, 09:47 PM   #6
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Posts: 74
Re: WSOP witholding tax - Canadian

I'm not sure about handling a staking question but I think I've seen it discussed either here or on Poker Forum Canada (http://www.pokerforum.ca/). Do a search of both sites and you might find specific info. As far as the general taxation of gambling winnings, here's a response I gave in another thread:
Quote:
Originally Posted by Gogie View Post
From a Canadian perspective, Canadians are subject to a US 30% withholding tax on gambling winnings in the US and this tax is generally applied on single wins of $1200 or more (different games may provide for higher thresholds and YMMV). A Canadian resident does not generally report gambling winnings as income for Canadian tax purposes (there are exceptions, such as if it is your primary or sole source of income) so there is no tax relief for US withholding tax in Canada. However, Canadians can file a non-resident US tax return and attempt to recover some or all of the US withholding tax. To do so, as with any other US income, they must be able to claim legitimate and verifiable expenses to offset some or all of their gambling winnings. For example, if the winnings were $10000 and the US withheld $3000 in taxes, to recover all of the tax withheld the Canadian would have to be able to deduct expenses of $10000. If they have expenses of less than $10000 they can still recover some of the tax. I'm not an expert so I don't know what types of expenses can be claimed, other than to say gambling losses can certainly be claimed. So, if you are a Canadian and you manage to hit it big one day, make sure you have at least kept track of all your losses on all those days you weren't so lucky. You can claim them against your big win (and losses in any game count, whether it be slots, table games or poker). I do speak from experience in this matter - my wife hit a $7000+ slot jackpot one time and was able to successfully file a US 1040NR return and recover virtually all of the $2100 in taxes that were initially withheld.
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Old 02-22-2014, 02:16 PM   #7
stranger
 
Join Date: Jan 2014
Posts: 7
Re: WSOP witholding tax - Canadian

I tried a search of both sites and just can't find anything on withholding tax and staking...I know this must be a pretty common issue because of how many Canadians must be getting staked or selling pieces at WSOP.

Still really want to figure this out.
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Old 02-22-2014, 03:29 PM   #8
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Re: WSOP witholding tax - Canadian

Google is your friend:

http://pokerfuse.com/features/in-dep...king-activity/

Next time give it a try.
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