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#51
08-26-2006, 09:16 AM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
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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#52
08-26-2006, 12:00 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
Maybe they're trying to figure out if that other guy's (Johnny Chan? whateva)10% comes out before the 50/50 split, after it, or independent of it. Several possible results: coach gets 1.2 million, G & L get 5.4 M each; L gets 6 mill, G gets 5.4, coach gets .6; L gets 6 M, coach gets 1.2, G gets 4.8. Seems like G would care a lot about getting the issue resolved before parting with 6 million, up to $600,000 of which could be (well, coach's share, but share that should be taken out of L's cut instead of his). And, in anticipation of discussions of typical backing arrangements, who knows what their agreement was: what are "winnings"? Who made the deal first (coach or L)? Etc. Just a thought
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#53
08-26-2006, 01:08 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
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? [/ QUOTE ] You're right. It isn't more complicated than that. That's why this "I haven't paid him what I owe him for tax reasons" excuse doesn't fly.
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#54
08-26-2006, 01:16 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
[ QUOTE ] 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? [/ QUOTE ] You're right. It isn't more complicated than that. That's why this "I haven't paid him what I owe him for tax reasons" excuse doesn't fly. [/ QUOTE ] I'm glad to read this, as I haven't had the foggiest idea how forming any type of coporation could avoid paying the 35%. Does California get a piece of the money also since he resides there? If so, I could see trying to avoid that....
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#55
08-26-2006, 01:18 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
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. [/ QUOTE ] Would there be any benefits to setting up a corporation to claim the prize? In the infamous phone call Gold mentioned working with tax attorney's to set up a corporation to claim the prize.
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#56
08-26-2006, 01:19 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
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. [/ QUOTE ] 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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#57
08-26-2006, 01:21 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
Nice post Nick, I hadn't really thought of it this way. [/ QUOTE ] Nothing personal, but did you, or anyone else for that matter, read beyond the headline. I thought this was made quite clear but everyone is acting like he stole $6m. Let's let all of the facts come out before we make judgements.
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#58
08-26-2006, 01:24 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
I am an authority on contracts since I took 1 semester of business law in college. I thought any contract over a set amount ($500?) had to be in writing or it was not valid, no matter what the circumstances?
Maybe he wants it done through a corporation due to the better treatment of tax rates?
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#59
08-26-2006, 01:29 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
[ QUOTE ] 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. [/ QUOTE ] 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. [/ QUOTE ] 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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#60
08-26-2006, 01:31 PM
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Re: Jamie Gold Responds to $12 M WSOP Lawsuit
[ QUOTE ]
I am an authority on contracts since I took 1 semester of business law in college. I thought any contract over a set amount ($500?) had to be in writing or it was not valid, no matter what the circumstances? Maybe he wants it done through a corporation due to the better treatment of tax rates? [/ QUOTE ] You're wrong on both counts.
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