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Thread: Sponsored/Backed

  1. #1
    onecardsteve is offline Junior Member
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    Default Sponsored/Backed

    Hello, quick question out there ; If a person wants to sponsor/back you in playing Poker, I am not sure of how all the details work on the bankroll given, taxes at tax time etc. Can anyone help me.

    Thank you

    Steve

  2. #2
    J_Verschueren's Avatar
    J_Verschueren is offline They call me "J"
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    Bankroll doesn't enter into it as it's basically the same as a wad of cash in your sock drawer. It in itself doesn't generate any income and therefore doesn't need to be declared (your income is already taxed, so, if you decide not to spend some of it immediatly, the government, thankfully, doesn't punish you for that yet). The problem is basically one of documentation as backing is usually a gentlemans' agreement rather than a contract.

    The way I would go about it would be to make sure all poker related transactions are made in casino chips. Get paid in chips and settle up with your backer that way, then cash out only net winnings. This way you have a slip from the cage you can declare as gambling winnings. Unless you're going to swap pieces or fund buy-ins yourself, I don't think you can claim them (or the piece you pay yourself) as gambling losses, but you should be able to claim miscellaneous poker related expenses if playing is your source of income.

    Caveat emptor: I'm not a US citizen, nor a professional poker player. I'm just applying some common sense to what I know about your tax laws.
    Last edited by J_Verschueren; Jun 20th, 2014 at 01:51 PM.

  3. #3
    RyckyRych's Avatar
    RyckyRych is offline Retired Micro Grinder
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    As far as taxes, its what you earn, period. So whatever money you end up with after playing while backed, that is what you would report. If you win $1000 but have to give $500 of that as part of your backing deal, you pay taxes on the $500 you "earned". Recordkeeping is absolutely vital, both for you and your backer. Be careful, I have read about many a horror story about backing, though these all had to do with being backed for online tournament play. Make sure you have the terms of the deal spelled out and that you don't play any games with backed money that wasn't agreed to.

    Being backed is usually what a player would want to do to play games that he couldn't afford with his own bankroll. Personally I like to back myself since that way I don't have to fork over any of my winnings. Plus, some people can't play their best with other people's money. Some are too reckless, others too cautious. If it were me, I'd just slowly build up my own bankroll and not worry about it.
    I do a new thing now. Hidden Content

  4. #4
    onecardsteve is offline Junior Member
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    Hi J, thank you for your information. I do have a question, how do you obtain a slip from the cage? I mean , how do you ask for a slip for the buy-in to cash out.

  5. #5
    onecardsteve is offline Junior Member
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    Hi Rycky, thank you for your information. your example of winning $1K giving half to the backer, and paying taxes on the $500. Are you classified as a Pro or Amateur?

  6. #6
    RyckyRych's Avatar
    RyckyRych is offline Retired Micro Grinder
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    I don't know if there is a classification involved. I would say that if you play poker full-time and the money is used as your main source of income to live on, you are a Pro. The amount you happen to win has no bearing IMO. I was never a pro, not even close. Still, you pay taxes on your profit from playing no matter what you are.
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