"Any increase in wealth is taxable (basic premise of Federal Income Tax Code). The 10K won is offset by 10K loss"

Satellite wins are exempted from tax per the Binions closing agreement with the IRS. If the issuing casino is following the BCA.

All of this is more than a new comer to poker can understand. This all happened in 1995 when Jack Binion closed the Hall Of Fame Tourny over an IRS ruling.
This is all about to change.

I'm done but I bet you guys attract Jimbo to this thread. He is the IRS special agent that negoated the BCA and got the HOF back open.
Jimbo and I co-authored a Card Player column on this way back then. It might be on line.