[jldecarlo]

A group of my regular poker buddies and I are going to the WSOP this year to play in one of the smaller buy-in tournaments. We have talked about all of us sharing a small piece of the other's action.

In theory it works like this. 20% of any cash that any of us receive in winnings is pooled and the total is split between all the the players equally.

None of us is a lawyer, but we want to draw up a simple statement to this effect and all sign it. Of course, likely none of us will win significant money, but we don't want any hard feelings or misunderstandings if we do.

The biggest question involves the split of significant money if somebody hits it big. Do we split pre- or post- taxes? How do we word it? Is this even allowed by WSOP rules? The incident with Jamie Gold suggests that it is alowed.

Any advice? are there any sample contracts floating around in cyberspace?

L

[JoseRijo]

Darn it, Leonard. I'm an engineer, not a lawyer. But I'm sure you would want
to do this pre-tax, not after taxes. That's because the taxes are almost
impossible to calculate and would be different for every individual.

Here's a staking contract from 2+2. It sounds like you shouldn't need anything
extravagant:

***Official Staking Thread: Ask for/Offer stakes (100 strat post minimum to post)*** - Two Plus Two Poker Forum

Good luck and keep us posted!

[tomb1]

For a big win taxes would be a problem. Harrah's (I'm not sure when they are changing their name to Caesar's) is going to ask for a tax number for the winner before they cut you a check, and that person will be responsible for the taxes. So if you give away some portion of your winnings pre-tax, you end up paying the taxes for the other people.

I also think that an automatic 20% is going to be withheld from all payouts (over a certain amount) for taxes this year because of a stupid tax law change effective March 2008. But I'm not sure on this....

I think you can split it to more than one tax number if you tell the casino before receiving the cash -- that's one reason Jamie Gold left his money unclaimed until he figured out who got what. But they may have changed the rule, or may be unwilling to record more than 2 people, or something like that. I wouldn't count on this.

I don't know how you set up an ironclad agreement on this. Do all of you trust each other? Would you be OK with something that says you'll split up the 80% payout (80% after tax of the 20% pool, that is) and then each one makes good on the net after-tax amount (plus or minus) after the winner's taxes are filed?

You also have to decide if you are going to report any small payouts on your taxes (payouts that aren't reported to the IRS by Harrah's). Or if you will net your expenses against these payouts to show an actual taxable gambling winnings amount on your return.

[trutan]

The WSOP league that I won my entry through gets a cut of anything I win. The way we have it set up is that 40% is taken off the top for taxes before their cut is calc'd. I then keep the first $3000 (2 x buy-in) and anything left is split 50/50 between me and the league.

Example:

Against all odds, I cash for $100,000.

I keep $40,000 for taxes (100,000 x .40)
I then get the first $3,000 (100,000 - 40,000 - 3,000 = 57,000 left)
I split the remaining 57,000 with the league (28,500/28,500)

End result $71,500 for me and $28,500 for the league. Taxes are my responsibility.

You still planning on playing event #49 Leonard?

[guinness]

Sounds like you should find other people to do this with...I mean..if I went with my poker friends I wouldn't need more than a verbal...I know thats not sound advice but the worry about hard feelings part makes it seem like everyone should go on their own merit if its that type of crew.

[OnTheButton]

Simple. No paperwork involved.

If one of them wins big, raise hell and demand your cut + 40% for taxes or you will sue them for breach of a verbal contract.

If you win significant cash, tell them all to pound sand, and inform them that they should learn how to play better poker instead of riding your coat-tails to success.

[jldecarlo]

Originally Posted by guinness

Sounds like you should find other people to do this with...I mean..if I went with my poker friends I wouldn't need more than a verbal...I know thats not sound advice but the worry about hard feelings part makes it seem like everyone should go on their own merit if its that type of crew.

There's no hard feelings involved and everybody thinks it would be a good idea to write down the details so there's no confusion later. I trust these guys, but writing something like this down can save an argument later.

L