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Staking and Taxes

FuriosusFuriosus Posts: 21SubscriberProfessional
A buddy of mine wants to stake me in an event at the WSOP. I have never been staked before, and have a few questions.

First of all, is there any type of standard contract that one fills out when being staked, or are most of these deals done with a handshake? I am perfectly happy doing a simple written contract between friends so there will be no questions what to do if I cash.

Secondly, I would like to know about the tax implications of staking. Through a little research on the internet, it sounds like if I cash, I will fill out a IRS form 5754 to the RIO, so they can issue a W-2G, which, in turn, will let the IRS know how much I earned. In theory, I would list my staker on this form, and the RIO would issue W-2Gs for both of us. The reality; however, is that the RIO refused to follow the rules, and will only issue the W-2G to me.

Does all of this sound about right?

Comments

  • BartBart Posts: 5,415AdministratorLeadPro
    edited May 2016
    The Rio doesn't use form 5754s. You will get a W2g if your net winnings are over $5000.

    If the staker's portion of winnings is more than $600 for the calendar year from you, you will issue him a 1099 or W2G for that year. If its less than $600 for the year no extra paperwork needs to be done (except the usual gambling log).

    Last year, I believe my package showed a 9.8% return and the largest portion bought by anyone was $6000. The winnings were less than $600 for everyone so therefore no extra paperwork had to be done.

    Bart
  • FuriosusFuriosus Posts: 21SubscriberProfessional
    The Rio doesn't use form 5754s. You will get a W2g if your net winnings are over $5000.

    If the staker's portion of winnings is more than $600 for the calendar year from you, you will issue him a 1099 or W2G for that year. If its less than $600 for the year no extra paperwork needs to be done (except the usual gambling log).

    Last year, I believe my package showed a 9.8% return and the largest portion bought by anyone was $6000. The winnings were less than $600 for everyone so therefore no extra paperwork had to be done.

    Bart
    Thanks. I think that I will just write up a simple contract with my backer.
  • BradleyT Posts: 621Subscriber
    It's so stupid the Rio doesn't take 5754. Anyway, if you ever need to fill one out elsewhere heres what you do.

    Winner info up top

    All people receiving payouts fill out name, address, SSN, amount of payout on the bottom. The casino will keep the 5754 and then issue everyone on the bottom a W2 for the amount listed.

    I've done half a dozen of them for non poker jackpots this year.
  • BartBart Posts: 5,415AdministratorLeadPro
    BradleyT said:
    It's so stupid the Rio doesn't take 5754. Anyway, if you ever need to fill one out elsewhere heres what you do.

    Winner info up top

    All people receiving payouts fill out name, address, SSN, amount of payout on the bottom. The casino will keep the 5754 and then issue everyone on the bottom a W2 for the amount listed.

    I've done half a dozen of them for non poker jackpots this year.
    When it comes to business and casinos stupid is the norm not the exception.
  • pHumphrey Posts: 1Member
    The actual amount of winnings from the poker tournaments that must be reported is $5k and higher. You'll get the special feature to the W2 form, a form W-2G. You must file it and you're clear then
  • BartBart Posts: 5,415AdministratorLeadPro
    pHumphrey said:
    The actual amount of winnings from the poker tournaments that must be reported is $5k and higher. You'll get the special feature to the W2 form, a form W-2G. You must file it and you're clear then
    Are you a bot?
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