WSOP: Bubbling better than a weak cash?

[Greg (FossilMan)]

I net my tournaments, both now as a pro, and years ago when I filed as an amateur. When I buy in for 10K and win 12.5K, I put down +2.5K on my books. As such, cashing would mean I win 2.5K, and pay taxes on it as income. Thus, I might end up with a net of anywhere from +1.3K to +2.3K, depending upon my other income, and the rate at which my total income is taxed.

If I bubbled, and was given a free entry to next year's event, I would put that down as a 10K loss, as I'm out of pocket 10K, and the item of value I was given has no value until the event takes place next year. If the entry is non-transferable, then I have no possession of it until they sign me up next year, so I think it is perfectly proper to treat it as valueless this year. Of course, next year, should I cash in the event, my entry fee would have to be considered $0. Thus, a 12.5K win would require me to pay taxes on 12.5K, not on just 2.5K.

Later, Greg Raymer (FossilMan)