Form 1099 For Prizes Over $600?

[grandgnu]

I run a home game of up to 16 players on two tables in Massachusetts. No rake, no house fee. Usually first place will win anywhere from $100-$500 depending on the turnout of players, the buy-in, etc.

This is tournament style, not cash ring games. I'm running my first $100 buy-in event where first place will wind up receiving $800-$900, and someone mentioned that any gambling winnings above $600 require a form 1099.

I was wondering if anyone has experience with this type of issue. I want to keep my home game running without it being busted for anything illegal or incorrect. I thought that with tournament events unless the payout was something like 300 times the buy-in, there weren't supposed to be taxes?

[Scotty O]

I wouldn't worry about it. It's a home game, private and should be kept that way. I assume you are inviting players you know and there shouldn't be any issue. It's not like you are running a business or a charity event.

Nashua NH has charity poker every week. They may issue a 1099 for winnigs over 600, but they have an established business. Here

Scotty O

[grandgnu]

[ QUOTE ]
I wouldn't worry about it. It's a home game, private and should be kept that way. I assume you are inviting players you know and there shouldn't be any issue. It's not like you are running a business or a charity event.

Nashua NH has charity poker every week. They may issue a 1099 for winnigs over 600, but they have an established business. Here

Scotty O

[/ QUOTE ]

True, I am not running a business or making a profit (unless I pay to play and win). But, I have turned to homepokergames.com to advertise my events.

Unfortunately my friends aren't always available to play, or don't have the money, etc. My events used to be 4-6 players on average, now they're 10-12 and I've been hitting the max of 16 for a number of events recently. I even had a lady who was passing through Massachusetts (she lives in Oregon) who contacted me to play an event.

The popularity has really taken off. And I want to make sure I do everything I can to keep it ethical, fair and legal.

While it probably won't be an issue, I just wanted to check with people here and see if they knew whether or not it COULD be an issue. Or, if because it's a tournament, the $600 prize or higher doesn't apply because of the buy-in?

[Scotty O]

I would be more concerned about the legallity of the event then worrying about the taxes. Since you are advertizing the event, you leave yourself open for anyone to play. You must have a lot of faith in the players that come, I know I wouldn't.

[grandgnu]

[ QUOTE ]
I would be more concerned about the legallity of the event then worrying about the taxes. Since you are advertizing the event, you leave yourself open for anyone to play. You must have a lot of faith in the players that come, I know I wouldn't.

[/ QUOTE ]

My understanding is that as long as I don't profit from the home game (via house fee or rake) I can hold these events in Massachusetts and it's ok legally.

As far as people from outside my circle of friends coming into the events. Yes, I understand the concern. I've tightened up my rules and setup to keep out the bottom dealers and cheats (i.e. use plastic KEM or Copag cards, use cut card, require deck remain on the table when dealing, etc.)

I've never had a fight break out (been doing this since 2002. I have had some people who were suspected of cheating in some form or another in the past (splashing the pot, "missing" antes, etc.) but I have implemented a penalty system to keep things running smooth and fair (and one of the offenders was one of my closer friends that I grew up with)

For the most part, I'd say 95% of the "strangers" that I've let into my home have been wonderful. Respectful players with good attitudes and either a solid understanding of the rules or a willingness to learn.

From time to time you get someone who can get a little hot under the collar, but they can be weeded out. And many of the "strangers" have become regulars at my events, and close friends who I discuss strategy with and swap stories of online poker (or play online against).

Some of them are also 2+2'ers that heard about my events right here. [img]/images/graemlins/smile.gif[/img]

[Rusty266]

Personally, I wouldn't worry about filling out a 1099. While the winners share may indeed require a 1099 form if won in a casino, I'm not sure you are subjected to the same requirements they are. You may or may not be, I am not familiar with the laws in your area. But ultimately it comes down to this. Its the winners responsibility to claim the income on his taxes if he so chooses.

Thinking of the situation in a worst case scenario, lets say you are supposed to fill out a 1099 form. The only way the IRS gets wind of the deal is if the winner turns you in. And my guess on that one is, its not going to happen because the last thing that guy wants is to have the IRS know he won money in a poker game, when in fact he has no intention of mentioning it to them at all.