Jamie Gold Responds to $12 M WSOP Lawsuit

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I cannot imagine how this is anything other than a very simple tax situation.

Gold files his 1040 with a Schedule C claiming the entire 12M minus various customary deductions of his trade. He gives Leyser a 1099 for 6M (and, of course, the 6M itself) and deducts that from his gross Schedule C earnings and pays taxes on the (roughly) 6M net left over.

Leyser in turn files a Sch C claiming the 6M from the 1099 income he received from Gold.

The government gets 35% of 12M either way, gift taxes are avoided, etc. This is just how it's done... now, can anyone hazard a guess as to why it would be more complicated than that?

I just cannot imagine that the tax ramifications of their deal are what is holding up the settlement.

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It sounded to me like Gold wanted to have the money paid into a corporation (that would presumably be newly founded with Gold and Leyser as the owners) so that they would be paying the corporate tax rates rather than the personal income rates. Of course, if they wanted to actually use the money, they would also have to pay personal income tax on the dividends, but they could release those over time to reduce their liability. I have no idea if this would work, but it is a plausible explaination.

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It's not a plausible explanation at all, because you can't do that. An individual cannot avoid paying taxes on poker winnings by setting up a corporation after he wins the money and funneling the money through it.

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I'm not saying you can do that. I'm just saying that Gold might think he can do that. In fact, that's what he says he is going to do in the phone message:

"I have the best tax attorneys and the best minds in the business working for me from New York and L.A. And what we’re probably going to do is set up a Nevada Corporation and it’s going to… I have to pay out of the corporation. I can’t just pay out personally because I could get nailed."

Gold might well be making a mistake in his tax planning that will result in greater liability for both himself and Leyser. But that doesn't mean he is trying to cheat Leyser out of his promised money.