I'm sure this has been discussed somewhere on these boards before, if not specifically in MTTC. If someone has a link to a good explanation, that'd be helpful. As it is, every time I ask a reputable source about this, there doesn't seem to be a single right answer.

Let's say someone is being partially staked for a $10K WPT tournament. For argument's sake, we'll say the staker is providing $5K of the entry and in return will receive 30% equity in the stakee's winnings.

The stakee goes on to win $100K. Here's where it gets hairy. Now I may be mistaken, but I assume that the IRS expects the tournament entrant to pay the entire tax obligations as if he/she won the entire $100K, and doesn't care to get invloved in what happens to the money afterwards. Or is there actually staking paperwork that can be filed so that the stakee is only responsible for paying the tax obligation on the $70K and the staker is responsible for paying the taxes on his $30K?

If the IRS doesn't make it convenient for us (which they have a habit of doing), then how is the tax obligation typically handled? Does the stakee first take out the estimated taxes from the winnings and only pay the stakee his cut of the remainder?

Lastly, how does that new law that requires taxes on tournament winnings to be withheld from the payout play into all this?

CLIFF'S NOTES: Run good and don't get married so you never have to be staked