Satellite wins and taxes

[Analyst]

I've just an entry into the Stars double-shootout WSOP satellite. If I were to win that sat, what are the tax consequences? Obviously, the prize itself (worth $11k) is taxable, but what are the tax implications if I go to the WSOP and bust out (the most likely scenario)?

Is the $10k entry fee considered a gambling loss, effectively making it a wash?

Or, is the entry fee considered an expense, deductible only if I file as a professional (which I'm not)?

Or is there a third possibility?

[broiler]

The answer is actually your third possibility since there are different parts to winning that you receive.

The spending cash that they give you is taxable since you won a tournament and are getting cash. The hotel and flight are taxable, if you want to be conservative with your earnings. Some people would say that it is required to get to the tournament and not taxable. I would include it only if I went to the tournament. The tournament entry is not taxable until you play. The gambling loss for the WSOP will be your cost to enter the satellite. If you cash, then the deductible entry fee will be the cost of the satellite, not the $10k buy-in.