Info taken from original article by Russ Fox at TaxTableTalk.com
The WSOP final table was a huge win no matter who took home the gold bracelet. In total, the final table participants won $25,932,167. Of that huge sum, the IRS pocketed $8,626,311, with $9,642,011 (37%) going to the taxman in all of the players’ countries combined.
Ryan Riess aggressive play coupled with a great run of cards led him to victory over Farber, the VIP casino host and amateur poker player. Riess pocketed the $8,359,531 first prize, while Farber could take solace for his second place finish with a hefty $5,174,357 payday. But, as tax attorney Russ Fox pointed out, those impressive scores are all pre-tax, and after doing a few estimates, he shows just how big of a bite each player's respective government will take.
Riess, the night's big winner, "doesn't have to deal with state income tax (Nevada doesn't have a state income tax)," he said. "However, he does have to pay both Federal income tax and Federal self-employment tax. I estimate that Mr. Riess will owe $3,478,818 to the IRS (a 42% tax rate)."
Since second place finisher Farber doesn't file as a professional poker player, he'll get off a little easier, but not by much. "As an amateur gambler, he doesn't have to worry about self-employment tax. Still, he'll have to fork over an estimated $2,026,527 in tax (39%)
Third place finisher and professional gambler Amir Lehavot took home $3,727,823 for his deep run. As a married resident of Florida, the poker pro won't have to worry about state tax on his winnings, but will still need to ship $1,549,200 to the Federal Government.
Fourth place finisher Sylvain Loosli is "the biggest winner" from a tax perspective. After relocating from France to London, he pays significantly less in taxes than he would in his home country. "The United Kingdom does not tax gambling winnings from its residents, including professional gamblers," said Fox. "The tax climate in France is anything but pleasant… The current maximum French marginal tax rate is 49%." Keeping all that in mind, Loosli's tax situation effectively puts him into third place with a net win of $2,792,533.
JC Tran, the chip leader and favorite going into the final table who ended up taking a disappointing fifth, will take a beating by the IRS as a professional poker player and California resident. In total he'll need to give up 47.56% of his earnings, which comes out to about $1,001,977.
Sixth place finisher and Quebec resident Marc-Etienee McLaughlin faces a complex tax situation, but as Fox points out, his home city has one of the highest marginal tax rates in Canada at 50%. Taking that into account, McLaughlin is likely to owe $792,935 on his $1,601,024.
Michiel Brummelhuis of Amsterdam seems to get off the easiest, as the U.S.-Netherlands tax treaty exempts his WSOP winnings from taxation. In his home country, gambling winnings are taxed at a flat rate of 29%. That means Brummelhuis will pay only $355,353 on his $1,225,356 prize.
Eighth place finisher David Benefield of New York is a student at Columbia University and former professional poker player. Mr. Benefield does have to pay both state and city income tax on his winnings. Of the $944,650 he won he'll owe $437,201 in tax (46%)
Finally, Mark Newhouse, the unfortunate ninth place finisher, didn't win anything over the $733,224 he was guaranteed in July. He'll lose about 44% of that ($322,879) to the to U.S. Government.
Once again the big winner was not the man who came in first; rather, it was the Internal Revenue Service. The tax agency has been rocked by scandals this past summer but it did very well at the Rio. The IRS will collect $8,626,311 for the United States Treasury. That’s more than the pre-tax first place prize of $8,359,531, over $3 million more than the after-tax first place prize, and more than the combined first and second place after-tax amounts. That’s because we all know that the house–the IRS–always wins.
The WSOP final table was a huge win no matter who took home the gold bracelet. In total, the final table participants won $25,932,167. Of that huge sum, the IRS pocketed $8,626,311, with $9,642,011 (37%) going to the taxman in all of the players’ countries combined.
Ryan Riess aggressive play coupled with a great run of cards led him to victory over Farber, the VIP casino host and amateur poker player. Riess pocketed the $8,359,531 first prize, while Farber could take solace for his second place finish with a hefty $5,174,357 payday. But, as tax attorney Russ Fox pointed out, those impressive scores are all pre-tax, and after doing a few estimates, he shows just how big of a bite each player's respective government will take.
Riess, the night's big winner, "doesn't have to deal with state income tax (Nevada doesn't have a state income tax)," he said. "However, he does have to pay both Federal income tax and Federal self-employment tax. I estimate that Mr. Riess will owe $3,478,818 to the IRS (a 42% tax rate)."
Since second place finisher Farber doesn't file as a professional poker player, he'll get off a little easier, but not by much. "As an amateur gambler, he doesn't have to worry about self-employment tax. Still, he'll have to fork over an estimated $2,026,527 in tax (39%)
Third place finisher and professional gambler Amir Lehavot took home $3,727,823 for his deep run. As a married resident of Florida, the poker pro won't have to worry about state tax on his winnings, but will still need to ship $1,549,200 to the Federal Government.
Fourth place finisher Sylvain Loosli is "the biggest winner" from a tax perspective. After relocating from France to London, he pays significantly less in taxes than he would in his home country. "The United Kingdom does not tax gambling winnings from its residents, including professional gamblers," said Fox. "The tax climate in France is anything but pleasant… The current maximum French marginal tax rate is 49%." Keeping all that in mind, Loosli's tax situation effectively puts him into third place with a net win of $2,792,533.
JC Tran, the chip leader and favorite going into the final table who ended up taking a disappointing fifth, will take a beating by the IRS as a professional poker player and California resident. In total he'll need to give up 47.56% of his earnings, which comes out to about $1,001,977.
Sixth place finisher and Quebec resident Marc-Etienee McLaughlin faces a complex tax situation, but as Fox points out, his home city has one of the highest marginal tax rates in Canada at 50%. Taking that into account, McLaughlin is likely to owe $792,935 on his $1,601,024.
Michiel Brummelhuis of Amsterdam seems to get off the easiest, as the U.S.-Netherlands tax treaty exempts his WSOP winnings from taxation. In his home country, gambling winnings are taxed at a flat rate of 29%. That means Brummelhuis will pay only $355,353 on his $1,225,356 prize.
Eighth place finisher David Benefield of New York is a student at Columbia University and former professional poker player. Mr. Benefield does have to pay both state and city income tax on his winnings. Of the $944,650 he won he'll owe $437,201 in tax (46%)
Finally, Mark Newhouse, the unfortunate ninth place finisher, didn't win anything over the $733,224 he was guaranteed in July. He'll lose about 44% of that ($322,879) to the to U.S. Government.
Once again the big winner was not the man who came in first; rather, it was the Internal Revenue Service. The tax agency has been rocked by scandals this past summer but it did very well at the Rio. The IRS will collect $8,626,311 for the United States Treasury. That’s more than the pre-tax first place prize of $8,359,531, over $3 million more than the after-tax first place prize, and more than the combined first and second place after-tax amounts. That’s because we all know that the house–the IRS–always wins.
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