wsop backers and taxes
 

I am selling 10 shares of myself to buy into a wsop event. I own 30%. If I win a significant amount how do the taxes work.
I believe I will sign for the winnings as they would not write several different checks. So would I have to pay tax on everything and then pay my investors who would then have to pay tax again? Anyone have info?

Re: wsop backers and taxes
 

[ QUOTE ]
I am selling 10 shares of myself to buy into a wsop event. I own 30%. If I win a significant amount how do the taxes work.
I believe I will sign for the winnings as they would not write several different checks. So would I have to pay tax on everything and then pay my investors who would then have to pay tax again? Anyone have info?

[/ QUOTE ]

check greg raymers site, I'm pretty sure he explains what he did

Re: wsop backers and taxes
 

i read it but it did not mention how the taxes worked exactly...he did pay taxes though.

Re: wsop backers and taxes
 

From a discussion last year:

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What you can do varies dramatically from casino to casino. At Foxwoods, they don't recognize deals, so you as the official winner are going to be reported to the IRS as such. Then, after the fact, you are going to have to issue some form 1099-misc to the IRS and to your backers, indicating to the IRS the partial distribution of this win from you to the backers.

If you're at some other casinos, if you hand them a form 5754 (is that the right number?) when you win, then the casino will pay the money out to each of you individually, and send in a form w-2g to the IRS for each of you individually as well. The form 5754 has the names, addresses, and SSN#s for each of you on it.

To be sure what to do, talk to the casino in advance, and to a tax professional (which I am not). Obviously, if you show up to the tournament with a form 5754 ready to go, you've got nothing to lose, as it will be meaningless if you don't win, or if the casino doesn't accept it.

Later, Greg Raymer (FossilMan)


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Re: wsop backers and taxes
 

Worry about it after you place in the money.