Quote:
Originally Posted by George Lind III
Yeah like I told him, my choices now are to either illegally launder the $ or to effectively be taxed twice on it. Just puts me in a horrible spot now.
george
i dont pretend to be an expert but the link i put above talks about getting a 1099 from him that describes the deal and how much of the taxes taken out were yours - granted you dont really know him but could at least be something - text below
e
Ideally, your backee would submit Form 5754 when he cashes, and Harrah's would generate two W-2Gs: one for you and one for him. However, Harrah's refuses to honor Form 5754. (That's a violation of federal law, but that doesn't help you.)
Because of this your backee should issue you a Form 1099-MISC at year-end showing how much of his winnings belong to you. He should note in the "Account Number" field that it's for gambling or the WSOP. You would then claim those winnings on Line 21 (Other Income) or your Schedule C (if you're a professional) with your other gambling winnings. Your backee would send the 1099-MISC and a Form 1096 to the IRS.
Finally, if you're in the business of backing--say you have a stable of horses like Sheets--then you should consult your professional tax advisor on dealing with some other issues that would likely arise.
-- Russ Fox