Re: One-Time Stakes and Taxes
Casinos are supposed to provide a form, I forget what it's called, at the time they payout the money on which you indicate what % is going to whom. Casinos often illegally refuse to do this.
Assuming this didn't happen, everyone is responsible for paying taxes on their own income -- the stakee's chunk goes into the stakee's gross gambling earnings, the staker's chunk goes into the staker's gross gambling earnings. Under no circumstances should the stakee pay the taxes on the full winnings.
The only issue is whether the stakee has an obligation to fill out a 1099 or some similar form informing the IRS of the identity of the staker and the amount paid to the staker. In the absence of a lawyer advising me I absolutely did not have to, I would if I were the stakee. There was a thread about this a while back in which adanthar (I think) and I discussed this issue.
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