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Old 12-11-2017, 10:56 PM   #1
Kwisatz_Haderach
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Join Date: Nov 2013
Posts: 26
Tax Question - Stake Share and 1099-MISC

Hello all,

I have a question concerning tax preparing for a staking relationship for a tournament I just placed in. Local and state taxes were withheld. My staker is owed 20% of the winnings and responsible for 20% of all the taxes (federal, state, and local).

This was an out-of-state tournament (did not take place in our home state).

I know I have to issue my staker a form 1099-MISC.
1) Do I need to issue him 3 different 1099s for the 20% of the winnings (1 for federal, 1 for his home state, 1 for the state in which the winnings were won)?
2) I need to file the 1099 form with the IRS (mail it to them). Do I need to do so with the states as well?
3) How do I deduct the 20% I pay him from my tax returns? Is there a spot on the return for this? If I just lower the W2-G winnings amount, will that not set off a flag with the iRS as it won't match the amount on the W2G that the casino files with the iRS?

Also, I am not filing as a professional (filing as amateur gambler).

Thank you very much!

Last edited by Kwisatz_Haderach; 12-11-2017 at 11:11 PM. Reason: amateur gambler, not professional
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Old 12-12-2017, 05:35 PM   #2
akashenk
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Join Date: Mar 2013
Posts: 1,570
Re: Tax Question - Stake Share and 1099-MISC

There's a special IRS form that casinos are supposed to accept which handles staking arrangements (though the WSOP does not recognize this IRS regulation). More info can be found in the following. Its an older link, but I think it still applies...

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

If you've already collected 100% of the winnings, you may want to consult an accountant.

There is also a thread somewhere on 2+2 that deals with lots of tax-specific issues. I don't know where it is, but you might be able to search around. If I come across it, I will post here.
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Old 12-13-2017, 12:58 AM   #3
DCJ001
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Join Date: Oct 2006
Location: Earth
Posts: 2,328
Re: Tax Question - Stake Share and 1099-MISC

Quote:
Originally Posted by akashenk View Post
There's a special IRS form that casinos are supposed to accept which handles staking arrangements (though the WSOP does not recognize this IRS regulation). More info can be found in the following. Its an older link, but I think it still applies...

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

If you've already collected 100% of the winnings, you may want to consult an accountant.

There is also a thread somewhere on 2+2 that deals with lots of tax-specific issues. I don't know where it is, but you might be able to search around. If I come across it, I will post here.
https://forumserver.twoplustwo.com/5...ted-rich-muny/
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Old 12-13-2017, 04:18 PM   #4
akashenk
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Join Date: Mar 2013
Posts: 1,570
Re: Tax Question - Stake Share and 1099-MISC

Quote:
Originally Posted by DCJ001 View Post
The US.Taxes sticky in that forum has a lot of info. Here are some other resources..


https://www.pocketfives.com/articles...ements-590580/

http://www.parttimepoker.com/poker-and-taxes

https://forumserver.twoplustwo.com/5.../#post31912083
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