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WSOP Winner Gets Tax Break On Winnings

Financial publication Taxable Talk has released a report that shows that this year's World Series of Poker Champion Pius Heinz will retain a large portion of his winnings; thanks to a tax treaty between the United States and his native Germany.

Heinz, who won $8.7 million at the Main Event will reportedly retain an extra 30% of his winnings thanks to the tax treaty. Furthermore, Germany regards gambling monies earned as having already been taxed, meaning that Heinz does not have to pay the German government either.

This financial break clashes with former WSOP winner Peter Eastgate of Denmark. Eastgate won $9.1 million in 2008's Main Event and had to pay back 73% of his winnings to the Danish tax authorities.

This year's second place winner, Martin Stazko of the Czech Republic, also will benefit from a tax treaty between his country and the United States. However, as a professional player, Stazko will hand over 15% of his winnings ($814,963). If Stazko was playing as an amateur player, his winnings would have been tax free.

Other notable tax burdens faced by World Series of Poker finalists this year include:

  • Ben Lamb, who finished third: Won slightly over $4 million (Will pay the IRS $1.5 million, but will not be taxed on a state level because he is a citizen of Nevada)

  • Matt Gianetti, who finished fourth: Won about $3 million (Will pay IRS $1 million, but is also a Nevada resident, so no state tax)

  • Phil Collins, who finished fifth: $2.2 in winnings (Will pay IRS $852,480)

  • Eoghan O'Dea of Ireland, who finished sixth: Won $1,720,831 (Will not pay US taxes because of treaty, but will pay Ireland 40% of his winnings, the highest tax rate of any other final table contestants)

Final table tax statistics are listed here:

  • Total Final Table Winnings: $28,279,219

  • Total Taxes Going To IRS: $3,819,362

  • Taxes To Czech Tax Administration: $814,963

  • Taxes To Revenue Commissioners of Ireland: $695,018

  • Tax To Ukraine Tax Service: $171,656

  • Total Final Table Taxes: $5,500,999 or 19.5% of the prize pool

  • Last year's tax rate: 42.99%

The entire report can be read at: http://www.taxabletalk.com/2011/11/09/the-real-winners-of-the-2011-world...

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