\"25% of your action\" and the high hand jackpot -- story + poll
 

A couple weeks ago, my poker buddy Slim gave me a call.

"Are you ready to rock Red Rock?" he asked. He is just dorky enough that he can get away with starting conversations in this way.

I was excited to go check out Red Rock, since those crafty Station peoples spent so much money building it, and since it sounds like the games are good. The only problem is that i've read that Red Rock only spreads 4/8, and i am not really rolled for 4/8 (i am broke and have had to take money out of my roll to pay bills on several occasions). In fact, i'm not even really rolled for 3/6, which has been my game for the last couple months. Also, i suck at poker.

"Well," Slim responded to my well-known-to-him tale of woe, "someone told me they do spread 2/4. But really, you should play 4/8, and i will take as much of your action as you like."

Slim is a giant wuss about a number of things that he needn't be a giant wuss about, but he makes up for this by being easy to talk into doing stuff. Like when we go skiing, and i say, "Hey, Slim, let's hit this rad little kicker. It's sweet and the landing is nice and soft". Then he says, "No, i'd better not..." and i know that he's remembering the time he broke himself hitting some huge jump a couple seasons ago. "Okay, well... wheeeee!" i shout, and hit the kicker, and then look uphill, where i see Slim mumble, "Dammit, tyler...", and then follow me and hit the jump and stick the landing and life is good.

"See? Told you!"

"Shut up, tyler."

Anyway, Slim has been hitting up Red Rock a lot this week. One day, he met up with another 2+2er who told Slim to quit wasting his time in the 1/2 game and step up to the 2/5. When Slim hesitated, this 2+2er offered to take half of Slim's action to get him into the more lucrative game. Of course, the experiment was a raging success, and Slim earned himself and his investor a tidy sum.

Knowing all this, i consider Slim's offer and decide that if i sell Slim 25% of my action, it's just like i'm playing 3/6, only the rake is relatively less. This arrangement also takes some of the sting out of the swings of 4/8. We play a few sessions this way, and it seems a mutually beneficial arrangement.

Fast forward to tonight. We are playing at the Gold Coast (because that's how we roll, bitches). I am playing 4/8, and Slim is taking 25% of my action. I open with TT in EP, get 4 cold-callers plus the BB (yes, this table rules). Flop is ATT, 2 opponents call all the way to the river, and i scoop a big pot plus a high hand bonus for quad tens.

I walk over to Slim, who is playing 2/4 with his gf. The gf is sweet-talking the rock to her right: "We have a lot of good players at this table. I don't like having to sit in between two good players. I'm not any good at this game." It is awesome to behold.

"So, Slim, how does our arrangement work for high hand jackpots?"

"Um... huh. I have no idea. That seems like something we should have figured out before."

We agree that the most sensible thing to do is to ask the B&M Forum its opinion. And here we are. With a poll!

(Note that Slim and i are good friends who trust one another, so there was no need for us to have any kind of technical, letter-of-the-law contract to forge our arrangement. And no matter what you crazy bastards tell us, there is no doubt that we will reach an amicable agreement about this particular issue. Still, it's always good to get an outside opinion or three, plus some random trolls, thread hijacks (WHY ARE YOU PLAYING AT GOLD COAST I HEAR THEY USE THE RAKE TO BUY BABIES ON THE BLACK MARKET ALSO THE WAITRESSES ARE UGLY), an "lol" from photoc, and someone asking where they should go in Vegas to play low-limit texas hold them.)

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

[/ QUOTE ]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

[/ QUOTE ]

[/ QUOTE ]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

25% of the bets you made during the hand effectively came from your bud so he should be given his share.. how much was high hand bonus anyway?

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

You never would have been dealt the quad tens at 4/8 if Slim hadn't made the deal with you. I say give him 25% of the jackpot.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

[/ QUOTE ]

[/ QUOTE ]

[/ QUOTE ]

I agree.

Karma will kick your azz if you don't.

http://www.backstreetmerch.com/image.../bsi_wcc05.gif

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
25% of the bets you made during the hand effectively came from your bud so he should be given his share.. how much was high hand bonus anyway?

[/ QUOTE ]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

I voted for "work out a compromise" but if the high hand jackpot was small (less than $1000) then 25% is probably best.

Much more problematic would be a bad beat jackpot on the order of thousands of dollars. Then I think you'd have to ask the question, would you have been at the casino anyways playing a lower limit (but still bad-beat raked) game? Eg, if you would have been there playing 3/6 instead of being staked 25% for 6/12... should your staker still get 25%? Maybe I'm just thinking greedy.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

25%.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

Thanks for the replies and votes. Not surprisingly, the overwhelming majority believes in doing the right thing. This is particularly non-surprising since none of it is your money.

The high hand was $933. This isn't a life changing amount of money, but it is the most money i have ever won at anything, ever. I cashed out for the night with $1352, which is by far the most chips i have ever lugged across a poker room floor. +36BB in 2 hours in addition to the jackpot. Poker is easy.

Because the jackpot is over $600, i had to fill out a W2-G and will have to pay taxes on the monies. Clearly, some amount of the jackpot needs to be removed for tax purposes before Slim gets his cut. What do y'all think is a reasonable amount to withhold?

I also decided long ago that 5% is a reasonable amount to tip on jackpots. In this case, i pushed the dealer $53 (5% + round it up + the extra 3 browns).

Soon after, this old guy starts berating me for being "cheap, cheap, cheap. Almost $1000 and that's all you gave her. You're a cheap bastard." I told him i was going to be polite and ignore him, so he continued to berate me for a bit then walked over to the dealer in question (who was now on her break) and presumably berated me there for a while.

I am a veteran (or at least an old hand) at the Gold Cizzle, so i'm used to dealing with cranky nits, but taking the piss out of an elderly fellow while i've got two racks of red sitting next to my 6-deep pyramid of browns wouldn't exactly be gracious winning. Still, the Brick & Mortar Forum seems like a good place to enjoy hypothetical Slings & Arrows that i could have slung at him. Who has good ones?

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

[/ QUOTE ]

[/ QUOTE ]

[/ QUOTE ]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Because the jackpot is over $600, i had to fill out a W2-G and will have to pay taxes on the monies. Clearly, some amount of the jackpot needs to be removed for tax purposes before Slim gets his cut. What do y'all think is a reasonable amount to withhold?

[/ QUOTE ]

25% of total jackpot you won - 25% of tip you paid - 25% of tax you paid = Slim's cut.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
25% of total jackpot you won - 25% of tip you paid - 25% of tax you paid = Slim's cut.

[/ QUOTE ]

Edit: i read this wrong initially. You aren't actually saying anything at all, because:

25% (jackpot - tip - tax) == 25% jackpot - 25% tip - 25% tax.

Thanks to the distributive property of multiplication, it doesn't matter when you extract his 25%.

Regardless, i'm trying to get a sense for how much $tax should be. Care to address that issue?

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Thanks for the replies and votes. Not surprisingly, the overwhelming majority believes in doing the right thing. This is particularly non-surprising since none of it is your money.

The high hand was $933. This isn't a life changing amount of money, but it is the most money i have ever won at anything, ever. I cashed out for the night with $1352, which is by far the most chips i have ever lugged across a poker room floor. +36BB in 2 hours in addition to the jackpot. Poker is easy.

Because the jackpot is over $600, i had to fill out a W2-G and will have to pay taxes on the monies. Clearly, some amount of the jackpot needs to be removed for tax purposes before Slim gets his cut. What do y'all think is a reasonable amount to withhold?


[/ QUOTE ]

What's with the snark? You ask us a question, we give you an answer. I can't speak for everyone else, but if a buddy stakes me 25 %, then anything I win is included in the stake. This obviously includes jackpots, because, as others have mentioned, part of the rake is going for the jackpot.

Now if I had to pay for gas as part of the trip, or any other direct expenses, I would probably deduct this from my gross winnings before paying out 25 %. So if you've paid a tip and will also have to pay taxes on your jackpot winnings, these amounts should be deducted before you pay out 25 %.

If you're unsure how much money in taxes you'll end up paying, take the net amount you're supposed to be paying taxes on and take off 30 %.

Obviously, if you were actually declaring all your poker winnings each year on your taxes, the tax issue wouldn't be a problem, as you'd just subtract the amount paid out to your buddy from your net winnings. But I'm doubting you do this.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
What's with the snark?

[/ QUOTE ]

It was a joke.

[ QUOTE ]

If you're unsure how much money in taxes you'll end up paying, take the net amount you're supposed to be paying taxes on and take off 30 %.


[/ QUOTE ]

Where does the figure 30% come from?

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
What's with the snark?

[/ QUOTE ]

It was a joke.

[ QUOTE ]

If you're unsure how much money in taxes you'll end up paying, take the net amount you're supposed to be paying taxes on and take off 30 %.


[/ QUOTE ]

Where does the figure 30% come from?

[/ QUOTE ]

A basic average of federal tax + state-to-state tax. Some states have no gambling tax, others have a rate as high as 10 percent, I think. I am not a CPA, but from what I've read 30 % is a good baseline.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
slim is paying the rake that feeds the high hand jackpot. 25% of it is his.

[/ QUOTE ]

[/ QUOTE ]

[/ QUOTE ]

[/ QUOTE ]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
What's with the snark?

[/ QUOTE ]

It was a joke.

[ QUOTE ]

If you're unsure how much money in taxes you'll end up paying, take the net amount you're supposed to be paying taxes on and take off 30 %.


[/ QUOTE ]

Where does the figure 30% come from?

[/ QUOTE ]

tyler,

It should be pretty easy to figure out the % you owe by looking at a tax schedule w/ the income you brought in last year. Even easier if you filled out a return last year.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
25% of total jackpot you won - 25% of tip you paid - 25% of tax you paid = Slim's cut.

[/ QUOTE ]

Edit: i read this wrong initially. You aren't actually saying anything at all, because:

25% (jackpot - tip - tax) == 25% jackpot - 25% tip - 25% tax.

Thanks to the distributive property of multiplication, it doesn't matter when you extract his 25%.

Regardless, i'm trying to get a sense for how much $tax should be. Care to address that issue?

[/ QUOTE ]

Well that was basically what I was saying. Anyway, the $933 probably isn't enough to shift you into a new tax bracket, so you could probably just use the % income tax you paid last year. Otherwise, wait until file your taxes to determine how much you owe him.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
It should be pretty easy to figure out the % you owe by looking at a tax schedule w/ the income you brought in last year. Even easier if you filled out a return last year.

[/ QUOTE ]

Actually, it's downright impossible to figure out until you actually do you taxes with exact numbers if you itemize and deduct gambling loses. How this added W2G income impacts your final tax burden depends on the size of your income and what other deductions you take.

So the only to-the-penny way would be to wait until next April when you do your taxes. Then fire up TurboTax and do them with the W2G income, then do it again without the W2G income. Then you can compute the difference.

On the other hand, if you don't itemize, the W2G income is stuck there, regardless of your losses. How much of that you will pay in taxes depends on your incremental income tax bracket. Income between $30K and $74K is taxed at 25%. The bracket above is 28%, the bracket below is 15%. You probably fall in one of those three. State and local taxes than go on top. Unless your incoming is sitting on the edge of one of the brackets, you can figure it out pretty accurately now.

Or you could have gone the technically correct route of filling out a form 5754 which is designed for EXACTLY this. You fill in your friend's name and SSN and file it with the Feds. It's basically saying "I won this, but it's being shared with him, so make him pay his fair share of the taxes himself". Then you could each do your taxes declaring your 75% share and his 25% share.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Otherwise, wait until file your taxes to determine how much you owe him.

[/ QUOTE ]

I find this to be most unreasonable. Suppose the OP dies and never files a tax return how would Slim get his share then? From reading the OP's post and answers I imagine he is in the 0% tax bracket and should give his backer 25% of the win after the toke.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Suppose the OP dies and never files a tax return how would Slim get his share then?

[/ QUOTE ]

Y'know, i wasn't really sure what kind of responses i would get in this thread, but i never would have imagined that they might include the contemplation of my death. [img]/images/graemlins/crazy.gif[/img]

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

If you were such good friends you wouldn't even be asking this question. Give him 25%.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

It sounds to me like Slim is both your friend and a good safeguard against going broke. Peel off 25%, make a subtle but unmistakeable mention of how you're covering the tax and tip, and move on. You'll be happier for it.

Regarding the jackpot tip, it sounded fine to me. Had you worked out 5% and then rounded down to $45, keeping the odd few dollars for yourself, I think it would have been inexusable. The round up with the extra browns seems reasonable.

Martin

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Not surprisingly, the overwhelming majority believes in doing the right thing. This is particularly non-surprising since none of it is your money.

[/ QUOTE ]
I'm surprised this is even a question, but it goes to show that when big money is involved, relative and subjective to the parties involved, funny things can happen to prior agreements. I think your tip was very generous.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

933 - 53Tip - 250Tax = 630 your net.

$160 to $180. Since you are friends, make it an even $200.

Then decide what the agreement covers in such 'oddball' cases for the future.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

Tyler drives my drunk ass around so I can spew chips throughout various Las Vegas poker rooms, so really, in a way, you all owe him. It seems like 25% is the concensus, so that clearly must include me being responsible for 25% of the tip. The tip was generous, but not overly so, in my opinion. $880 is the net from the jackpot since nothing was actually withheld for taxes right there, and we're each on our own as far as reporting to "the man" as we see fit. Right? Tyler subtracts anything he pays me from his session net and I add anything he pays me into my session.

It was great to see something good finally happen to you after about a million consecutive losing sessions. My favorite part was watching you try to pick up 7(?) racks of chips, refusing any help on the grounds of "how often do I get to carry 7 racks to the cashier?"

Also OMGWTF GOLD COAST OLD NITS SELLING THEIR CHILDREN FOR A SETUP WTF WHY PLAY THERE? How should I get my 2/4 hold them bankroll to Vegas to gamble underage fake ID staying at Luxor anyone ever heard of it... cocktail waitress... gasp... hijack... lol.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
$880 is the net from the jackpot since nothing was actually withheld for taxes right there, and we're each on our own as far as reporting to "the man" as we see fit. Right?

[/ QUOTE ]

no. Tyler is stuck right now with a W2G that says he got $930. IRS is gonna be PO'd if he doesn't report $930 of gambling income this year. So "you guys" are paying the IRS, like it or not. This isn't a "as you see fit" thing. You're stuck with it.

So either y'all do a 5754 and each pay your income tax separately (way too much bother), or you just make a guess as to how much income tax Tyler will owe on this. If you live in Nevada, and make a middle-class income, it's gonna be 25%.

So the net to Tyler is $933 * 0.75 - $53. By my probably broken-in-some-way reckoning, he owes you $162 for the jackpot.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

And I thought everybody in town capped their high hand jackpots at $599 just to avoid the W2G silliness. Gold Coast is the first I've heard that doesn't.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

OK, I think I get it. I just want to make sure that he doesn't get stuck paying my taxes as well, and then I pay taxes on anything I get from him. There the only winner is Uncle Sam, and that simply won't stand. Basically, I want to "kick back" the taxes that it sounds like he'll be forced to pay on my share of the profits, because the way I report my poker earnings, I'm going to end up paying taxes on them anyway.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
And I thought everybody in town capped their high hand jackpots at $599 just to avoid the W2G silliness. Gold Coast is the first I've heard that doesn't.

[/ QUOTE ]

When they first introduced the high hand promotion, things were capped at $599 per usual. Then they uncapped them.

I was sitting at a 2/4 table there when this old woman (she is a fish so old that i call her The Coelacanth) hit a heart royal for over $2500. A rack of green at a 2/4 table == mega-awesome.

The Coelacanth is so passive that when she went 4 bets on the river, i knew she had the royal.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
So either y'all do a 5754 and each pay your income tax separately (way too much bother), or you just make a guess as to how much income tax Tyler will owe on this. If you live in Nevada, and make a middle-class income, it's gonna be 25%.

[/ QUOTE ]

Unless of course Tyler will itemizing his deductions and declaring losses that equal his gambling winnings in which case the net tax on his gambling winnings would be 0.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
And I thought everybody in town capped their high hand jackpots at $599 just to avoid the W2G silliness. Gold Coast is the first I've heard that doesn't.

[/ QUOTE ]

When they first introduced the high hand promotion, things were capped at $599 per usual. Then they uncapped them.

I was sitting at a 2/4 table there when this old woman (she is a fish so old that i call her The Coelacanth) hit a heart royal for over $2500. A rack of green at a 2/4 table == mega-awesome.

The Coelacanth is so passive that when she went 4 bets on the river, i knew she had the royal.

[/ QUOTE ]


When I hit quad 8's for an $80 dollar jackpot playing 6/12, the guy I raised on the river fliped the [censored] out on me for trying to get an extra bet..

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
[ QUOTE ]
So either y'all do a 5754 and each pay your income tax separately (way too much bother), or you just make a guess as to how much income tax Tyler will owe on this. If you live in Nevada, and make a middle-class income, it's gonna be 25%.

[/ QUOTE ]

Unless of course Tyler will itemizing his deductions and declaring losses that equal his gambling winnings in which case the net tax on his gambling winnings would be 0.

[/ QUOTE ]

I kinda alluded to that earlier when I said if he itemizes to run TurboTax with and without the W2G and split 25:75 whatever the difference is, but you can't do that until the year is done. I also figure if Tyler needs staking from Pick he probably is not the itemizing type.

If he IS the itemizing type, then he gets to worry about having too much income and having his schedule A deductions start phasing out. Even if you itemize, if you make too much you can't deduct all of your losses... at some income level the Feds start whacking off deductions. So if you have a couple million dollar income, and $100K in winnings and $500K in losses, you're still gonna pay tax on a fair fraction of that $100K despite actually being a big loser for the year.

Congress sucks.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
a fish so old that i call her The Coelacanth

[/ QUOTE ]
Gold.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

Congress does suck.

We settled on $165, but I have to come up with a whole new section in my spreadsheet for "non-taxable poker income." I'm am not looking forward to being audited, dumping 2 banker's boxes of paper on some poor IRS person's desk, and saying "It's all there. Let me know if I [censored]ed anything up," as I walk out the door. (lacky-style)

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

Sharing bankrolls?
Sound like collusion to me. Are you guys in "the crew?"

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Sharing bankrolls?
Sound like collusion to me. Are you guys in "the crew?"

[/ QUOTE ]

That's how I roll to play 2/4, biatch. My crew works the Gold Coast room like high-rolla-ballas.

Seriously, don't make me post my donk outfit picture again.

Re: \"25% of your action\" and the high hand jackpot -- story + poll
 

[ QUOTE ]
Congress does suck.

We settled on $165, but I have to come up with a whole new section in my spreadsheet for "non-taxable poker income." I'm am not looking forward to being audited, dumping 2 banker's boxes of paper on some poor IRS person's desk, and saying "It's all there. Let me know if I [censored]ed anything up," as I walk out the door. (lacky-style)

[/ QUOTE ]

Just like there are some things you don't tell your mother, there are some things you shouldn't tell the IRS. You guys are complying with the spirit of the law--Tyler will pay the tax and the Feds get their cheese. But the IRS auditors aren't going to be very happy seeing your spreadsheet with the "pre-taxed income from staked poker players" section.

If Tyler ends up winning a $20K badbeat jackpot, don't try to do it this way. But for your $165 of income, doing it "right" is just far too much work. (Actually had an accountant tell me that when I was complaining about the shortcut he was taking...yes, what he was doing was not strictly legal, but the result would be the same if he did it by the book but it woulda been FAR more work and just wasn't worth the effort for a few hundred dollars; he claimed IRS auditors do understand that people do such things and aren't gonna get their knickers in a twist over it long as the tax gets paid somehow.)