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With the IRS ruling that properties must hold 25% of poker tournament winnings over $5,000, who will have any money left to play?

I can't wait to see the revolt from all of the players who put up $10,000 plus juice, get in the money, go collect their $16,000 and find the casino only gives them $12,000. As the 25% held back for taxes is on the entire amount won, not the net (as I understand it).

Of course, you can't carry forward loses, so this puts anyone playing tournament poker so far behind the "eight ball", that there is no way to come out ahead.

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I do not think you are correct. The casino must take into account the buy-in for the tournament so in your example, the "winnings" would be $6,000 (minus juice over $10K) so the tax withheld would be $1,500.

I do hate the IRS tho.

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No you would get taxed on the full cash most likely, thats what the IRS withholds for canadians.