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Poker Legislation & PPA Discussion hosted by Rich Muny Discussions of various poker-related laws and steps players can take to push for better laws.

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Old 05-23-2018, 06:18 PM   #1
Props123
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Recently sold piece of large score, how to handle taxes

Hello, recently just had a 140k live score and had sold a 5% and 3% peice to two friends. First major live cash, how do i handle taxes from their piece? Deduct an amount to pay them or are there certain forms?

Last edited by PokerXanadu; 05-30-2018 at 07:38 PM. Reason: spelling correction in title
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Old 05-23-2018, 07:21 PM   #2
PokerXanadu
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Re: Recently sold piece of large scroe, how to handle taxes

Read the US Taxes Sticky in this forum, section on staking.
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Old 05-28-2018, 11:38 AM   #3
Lego05
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Re: Recently sold piece of large scroe, how to handle taxes

Quote:
Originally Posted by Props123 View Post
Hello, recently just had a 140k live score and had sold a 5% and 3% peice to two friends. First major live cash, how do i handle taxes from their piece? Deduct an amount to pay them or are there certain forms?

DISCLAIMER: THE BELOW IS NEITHER LEGAL NOR ACCOUNTING ADVICE. I AM NOT YOUR ATTORNEY. IF NECESSARY, YOU SHOULD RETAIN AN ATTORNEY OR ACCOUNTANT IN YOUR JURISDICTION TO ADVISE YOU.


Assuming the U.S., and assuming you got a W2-G for this, what most people do is:

1. Give $7,000 (assuming he already gave you his part of the buy-in; otherwise deduct that) to the friend with 5%. But not before he provides you the information set forth in number 3, below, that you will need. I don't know how good a friend he is, but to be safe you should ask him to fill out and sign a Form W-9 to certify his social security number to you before you give him his money.

2. Give $4,200 (assuming he already gave you his part of the buy-in; otherwise deduct that) to the friend with 3%. But not before he provides you the information set forth in number 4, below, that you will need. I don't know how good a friend he is, but to be safe you should ask him to fill out and sign a Form W-9 to certify his social security number to you before you give him his money.

3. Send a Form 1099-MISC to the friend with 5% with his share of the profits in box 3. You're going to need to complete boxes with the friend's name, address and social security number.

4. Send a Form 1099-MISC to the friend with 3% with his share of the profits in box 3. You're going to need to complete boxes with the friend's name, address and social security number.

5. When you file your taxes and your friends file their taxes, you should all include an attached explanation of this. You should all explain that they paid a portion of a buy-in for you to play a poker tournament(s) and in return received a part of the winnings. You should all explain (and actually should do it) that each of your respective part of the winnings are included on your respective Form 1040 on the "other income" line in the gambling winnings that you each included there.

Here is a link to the U.S. income tax thread that PokerXanadu referenced:

https://forumserver.twoplustwo.com/5...-poker-740589/



DISCLAIMER: THE ABOVE IS NEITHER LEGAL NOR ACCOUNTING ADVICE. I AM NOT YOUR ATTORNEY. IF NECESSARY, YOU SHOULD RETAIN AN ATTORNEY OR ACCOUNTANT IN YOUR JURISDICTION TO ADVISE YOU.

Last edited by Lego05; 05-28-2018 at 11:47 AM.
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