So with all this talk about deals and chops and how the WSOP doesn't allow it, I've got a question. How are deals and chops facilitated when W2G tax forms have to be issued?
The federal government requires a W2G to be issued any time a player profits more than $5000 in a poker tournament.
So if two players are heads up at the WSOP, where the only deals allowed are the gentleman's agreement to split the money after the tournament, the winner is still on the hook for the taxes on the entire first place prize. Do they simply crunch the numbers and leave enough sugar for the winner to cover that?
Furthermore, how do taxes work when a player is staked? Does the player keep enough of the prize money to cover taxes before distributing the money to the backers? Or is there a way to officially transfer the tax obligation?
The federal government requires a W2G to be issued any time a player profits more than $5000 in a poker tournament.
So if two players are heads up at the WSOP, where the only deals allowed are the gentleman's agreement to split the money after the tournament, the winner is still on the hook for the taxes on the entire first place prize. Do they simply crunch the numbers and leave enough sugar for the winner to cover that?
Furthermore, how do taxes work when a player is staked? Does the player keep enough of the prize money to cover taxes before distributing the money to the backers? Or is there a way to officially transfer the tax obligation?
