#31
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Re: New Tax Law - Witholding
Can you explain how it will complicate backing arrangements?
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#32
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Re: New Tax Law - Witholding
soon time to move
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#33
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Re: New Tax Law - Witholding
[ QUOTE ]
man I read through this whole thread before reading the article and got all worried, then realized its only for live poker. Whatever [/ QUOTE ] dude ty so much, ship the internet pokerings, WHEEEEEE |
#34
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Re: New Tax Law - Witholding
This is really going to hurt live tournaments in the US. Some people may have a hard time showing their losses to get the withholding back and the reality is some amateur and professional players don't pay taxes on everything. So this will encourage people to play anything else, online MTTs, cash games, oversees, and tournaments at illegal clubs.
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#35
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Re: New Tax Law - Witholding
[ QUOTE ]
Can you explain how it will complicate backing arrangements? [/ QUOTE ] It will create major cash flow problems for backers, especially if they are doing it on a huge scale. Here's a chart I made for various ROIs which show the net cash flow for $200K of buy-ins. You'll eventually get the money back when you file your taxes, but it's a real hassle. Basically, you're going to have to have a 33 1/3% ROI to break even in terms of cash flow during the year: Buy-Ins ROI Gross Net Withheld Net Cash Flow 200000 0.2 240000 40000 60000 -20000 200000 0.3 260000 60000 65000 -5000 200000 0.4 280000 80000 70000 10000 200000 0.5 300000 100000 75000 25000 200000 0.6 320000 120000 80000 40000 200000 0.7 340000 140000 85000 55000 200000 0.8 360000 160000 90000 70000 200000 0.9 380000 180000 95000 85000 200000 1.0 400000 200000 100000 100000 Sorry about the columns, they're straight when I type it in, 2P2's formatting is messing them up. Given these issues, backers are probably going to be less willing to shell out the money since their return is being delayed, and/or will negotiate terms less favorable to the players. For example, a backer could make a player give the backer the amount of money withheld from the backer's share whenever the player cashes with an agreement to return the difference when the backer gets it back from the IRS. And makeup will have to be dealt with differently, since a player will not be able to get out of a hole, at least from a cash flow perspective, as easily now. |
#36
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Re: New Tax Law - Witholding
Does anybody know how this would effect satellites?
Lets say you enter a $250 super satellite to the WSOP main event and win a $10,000 seat. Is there going to be withholding from that "tournament" to the tune of $2,500 leaving you only $7500 or enter the main event? |
#37
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Re: New Tax Law - Witholding
As far as I know:
Tax wise satellites yelding non-transferable seats are considered a "parlay" bet - i.e. satellite wins are not taxable until you cash in the target tournament, and don't affect your agi. Somebody should confirm this. |
#38
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Re: New Tax Law - Witholding
I'm curious to whether this will spawn a new breed of low buy-in B&M tournaments, where the top N finishers all are paid $4,999.00.
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#39
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Re: New Tax Law - Witholding
I thought it was 25% of money >5000?
Like you win 10,000, they withhold only 25%(10,000-5000) Is that not correct? |
#40
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Re: New Tax Law - Witholding
No I do not think that is correct. If you win a tournament that pays $5,100 they are not going to only withhold $250
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